- HEADLINES: Corn falls on Midwest planting weather forecast; Oil share spread out to 42%; India government wants first shot at wheat harvest.
- Midday Chicago values are mixed with the grains lower while the soy complex bounces. Selling in corn futures developed on news that China may be slowing its corn import pace, but more importantly on the open planting window that is offered across the Midwest after April 12. Warmer Central US temperatures and sunny skies are viewed as bearish as US corn seed gets planted on a timely basis. And history shows that when corn is planted early, US farmers tend to seed more corn and less soybeans. Hence the modest strength in the soy complex. Wheat is just a follower with May Chicago wheat futures unable to rise above its 50-day moving average. As corn sagged, so did wheat.
- It seems Chicago/Paris futures are not ready to sustain a trend. Avoid selling sharp down days (today) or chasing rallies like last Thursday. Soyoil has a bull story on rising tropical oil values and the coming increase in US renewable diesel capacity. Also, the California Air Quality Board will be voting on feedstock origin certification in BOD meetings scheduled on April 11 and April 25-26. The certification of feedstock origins should help limit the import of tropical oils that are passed along as used cooking oil. A close above $0.498 May soyoil is needed to confirm a more bullish trend on the daily charts.
- Managed money has been on both sides of the Chicago grain markets this morning. Futures brokers estimate that fund managers have sold 5,400 contracts of corn and 3,200 contracts of wheat, and 3,700 contracts of soymeal. Fund managers have purchased 2,900 contracts of soybeans and 3,100 contracts of soyoil. We calculate that the oil share spread has pushed out to a new high at 42.4%.
- Central US weather is gaining the attention of traders. An open mid-April window for corn/soybean seeding is pressuring summer row crop futures, while Paris wheat futures are finding support on the excessively wet conditions across Western Europe and the net drying of soils across the Black Sea. And the US Plains need rain. There is a chance of Plains rain from April 10-12. Thereafter, rain chances decline as a broad ridge/trough form across the US. World weather patterns lean supportive of wheat and slightly bearish of summer row crops. In particular, close attention needs to be paid to Black Sea weather (warming temperatures and limited rain into April 20) for wheat.
- India is asking traders to avoid securing new crop wheat so that state reserves can be replenished. India’s state wheat stocks are at a 7-year low. The last time that the Indian government made such a request of traders was back in 2007 when world wheat values neared record highs. India is forecast to harvest a 2024 wheat crop of 112 million mt, right at estimated domestic consumption implying that 2024/25 Indian wheat carry in stocks will be no larger than 9-10 million mt. India is on the cusp of becoming a sizeable wheat importer in coming years as its population and standard of living improves.
- The midday weather forecast is drier across the W Midwest and the Plains than was offered overnight and on Monday. The models have shifted the heavier rains further east. Note that the Northern Plains hold in an arid weather trend as does much of the Canadian Prairies. Any weather delayed seeding will be across the NE US and the Gulf States where 2-4.00” of rain are forecast to fall. Warmth spreads across the entire Central US in the week 2 forecast with moderate ridge of high pressure to build across the South-Central US. This ridge is progressive and does not pose a drought risk.
- Neither the bulls nor bears are pleased with choppy Chicago price action following last week’s USDA March Stocks/Seeding Report. Sustained price trends are lacking with soyoil being the only commodity that has upside based on rising world tropical oil demand. A close above $0.498 May soyoil would confirm the next bull leg. April Chicago grain prices are often changeable like spring weather. May corn futures have support below $4.25 and May wheat below $5.40, and May soybeans below $11.70.