- Chicago futures have recovered as the US$ retreats from its session highs. The dollar is still in positive territory, but the macro landscape today is moderately improved. Gasoline futures are up another two cents, which has pushed ethanol blend margins to new six-month highs. Currencies in Brazil and Australia are a bit stronger at midday. EU grain and oilseed futures are steady to higher.
- Funds as of midday are estimated to have bought a net 2,500 contracts of corn, 2,000 contracts of wheat and 3,500 contracts of soybeans.
- US weekly export sales were also at/above expectations. Through the week ending April 18, the US sold 31 million bu of corn, down 6 million from the prior week but a solid 5 million above the pace needed to hit the USDA’s target. Soybean sales totaled 22 million bu, vs. 14 million the previous week. 8 million bu of beans were sold to China. Wheat sales last week totaled 16 million bu, vs. 12 million the previous week amid enlarged demand from Mexico. No new pork sales were made to China.
- For their respective crop years to date, the US has sold 1,790 million bu of corn, down 9% from a year ago; 1,649 million bu of soybeans, down 17%; and 931 million bu of wheat, up 9% from a year and just 18 million bu shy of the USDA’s forecast. Following this week’s much improved wheat shipment pace, it is no longer certain that the USDA will lower US wheat exports further.
- US Treasury Secretary will be meeting with Japanese negotiators today as bilateral trade progress continues. The aim for ag trade is to match those included in the TPP agreement. Limited news is available on US-Chinese progress, with the US team travelling to China early next week.
- Australian wheat planting typically begins today (Anzac Day), but it is unlikely that progress will be widespread amid little/no soil moisture across the whole of the wheat belt. FAS estimates that soil moisture in Australia ranges from 0-20% of capacity, and the two-week forecast maintains complete dryness there through May 10. New crop Aussie wheat futures have climbed $7/mt since early April, and today are trading at $6.40/bushel.
- The US weather forecast is little changed at midday, but we mention that heavy snow is possible across the Dakotas and parts of IA, MN, WI and far northern IL on the weekend. Ongoing wet/snowy weather has pushed spot oats futures above $3.00 today. Oats have added some $.40/bu of weather premium since the early part of March.
- The midday Central US GFS weather update remains consistent in the return of wet and cooler weather beginning today. Confidence in the details is rising, and the primary concern remains potential flooding in the 5-10-day period. Moderate rainfall will linger across much of the Corn Belt through the weekend. Heavier showers occur next Wed-Sat, with totals upward of 3-6″ offered to the OK, AR, MO, IL and IN. The extended forecast is a bit wetter and includes yet another event sweeping across the N Plains and Upper Midwest. The forecast is not conducive to planting/fieldwork between now and May 10.
- World supplies are adequate and will remain so without widespread adverse Northern Hemisphere weather. It is just that very little weather premium exists in current prices and a host of stock/use analysis suggest the markets today are the lower end of fair value. Funds net short position in corn and KC wheat remains excessively large.