- Improved Northern Hemisphere weather is pressuring Chicago values amid a lack of fresh export news at midday. Wheat is the downside leader on new fund selling while large S American crops overhang corn. Soybeans have had some bounce, but any rally has been less than 2.5 cents. In a nutshell, it is more of the same as funds pressure Chicago by adding to a large net short, cash basis firms in the country on a lack of farm selling, and July-May spreading is the big feature ahead of first notice day. Chicago values are grinding lower. Note that May options expire on Friday. We look for a lower close today with some modest support noted in soybeans. Traders are discussing that China may make an additional purchase of US soybeans late week, ahead of the US delegation heading to China, to fulfill their obligation to purchase 10 million mt of US soybeans. However, note that the same rumour existed last week which did not result in any new purchases.
- Chicago brokers estimate that funds have sold 3,000 contracts of wheat, 2,000 contracts of corn and 500 contracts of soybeans. In soy products, funds have sold 1,000 contracts of soyoil while being flat in soymeal.
- US grain export inspections for the week ending April 18 were; 53.3 million bu of corn, 14.0 million bu of soybeans, and 29.8 million bu of wheat. And 3.7 million bu of US sorghum was shipped out to Spain and South Africa (combined). The US export pace was slightly better than expected in the grains and less than expected in soybeans.
- For their respective crop years to date, the US has shipped out 1,310 million bu of corn (up 136 million or 11.5%), 1,140 million bu of soybeans (down 433 million or 27%), and 762 million bu of wheat (down 28 million or 3.5% from last year). The US needs to export 51 million bu of corn per week to reach the USDA 2018/19 corn export forecast of 2,300 million bu, 36.6 million bu of soybeans/week to reach 1,875 million bu and 28.7 million bu of wheat/week to reach the annual forecast of 945 million bu. A further cut in US 2018/19 US corn/soybean export estimates is expected in the May WASDE.
- The US announced that it will exclude all waivers for Iranian crude oil after May 1, which is expected to drive Iran’s crude exports near zero. Iran has been exporting 2.5 million barrels per day before the sanctions were imposed a year ago, but the latest OPEC estimate is that Iran is exporting just over 1.2 million barrels per day in recent months. The Trump Administration claimed that Saudi, UAE and others would try to make up the difference. But, with sanctions in place for Venezuela and Libya struggling with internal strife, the world is lacking adequate spare supply of crude. A further rise to $70-75.00 WTI is expected with some suggesting a summer price high closer to $80.00 .
- The midday Central US GFS weather forecast is wetter in the 7-15 day period. Confidence in the extended range outlook is rising as the GFS model forecast is looking more like the wet European solution. The best rain looks to drop across the NC Midwest with a spell of heavy rain through NE/IA. One storm system is now moving eastward through the Lake States with another several systems due next week. The midday forecast is also cooler than what was offered overnight with high temperatures ranging from the 50′s to mid 70′s. The cooler/wetter forecast needs to be closely monitored with the seeding just underway across much of the South-Central US.
- Chicago grain prices are lower on a more of the same kind of day with fund selling pushing values slightly lower. However, the volume is not heavy and we would put money on a turnaround Tuesday as the midday Central US forecast went cooler/wetter. Grains are the only commodity group that has not rallied in 2019. The supply bear is ongoing, but with funds holding a record short and the US/China talking a deal, one must be careful in holding a short position.