• HEADLINES: Wheat extends rally; Plains/Black Sea forecasts not wet enough; US planting stalls next 7-10 days.

• Chicago July wheat rallies to test 200 day moving average at $6.285 on fresh fund short covering; Soybean futures sag on worries that US farmers could shift acres from corn to soybeans on coming wet weather and cheaper seeding cost; Argentine farmers power ahead with the soy harvest as the Peso leads the world in appreciation vs the US dollar. The rising Peso and waning inflation have Argentine interest rates declining and farmers wanting to sell the new harvest.

• Morning Chicago values are mixed with soy futures weaker and corn/wheat futures firm on inter-crop spreading. May Chicago options expire today which is likely to add volatility to the close. But as in recent Fridays, traders are adjusting their market risk downward amid world geopolitical worry with a large share of the world preparing for the May Day Holiday. Europe, Russia, and a host of nations in SE Asia will be on holiday for most of next week. We look for continued long grain vs short soy spreading and for oil to gain on soymeal due to Argentina’s return as the world’s largest soymeal exporter. US meal exports are in seasonal retreat and an abundance of cash soymeal will be produced as Midwest crush plants come back online from seasonal maintenance.

• Chicago brokers estimate that fund managers have bought 2,600 contracts of wheat, and 2,900 contracts of corn. Funds managers have sold 2,400 contracts of soybeans and 1,700 contracts of soymeal, while buying 1,400 contracts of soyoil. Soymeal is the favoured fund leg of any short with the CFTC report to suggest that managed money is either flat or slightly long of soymeal through Tuesday’s close. The US wheat, soybean and corn shorts will be sizeable.

• The USDA will require that dairy cows have electronic ID’s as they move across state lines as testing for bird flu dramatically ramps up. The FDA has found that 1 in 5 samples of milk have traces of HPAI, but the US milk supply remains safe due to pasteurisation. The USDA/APHIS and FDA will continue to work to assure the safety of US milk and dairy products. So far, there has been no evidence of consumer reluctance to buy and consume US dairy products.

• The midday Delta/S Midwest GFS weather forecast is wet with 2-5.00+” of rain to fall across MO/IA/AR/OK into May 5. The rain is further south and west than the overnight run. The GFS forecast does not place meaningful rainfall into W or C Kansas. The forecast does NOT show any meaningful KS rainfall until the 11–15-day period. Central US temperatures will be warming with highs in the mid 60’s to the lower 80’s next week. Near normal rainfall is offered during the 11–15-day period to restart spring seeding. The risk is that Midwest corn seeding stalls as an active pattern holds across the Central US. The AI models have more rain that either of the conventional forecasts for the Central US.

• Wheat is rightfully in a weather market. Corn awaits clarity over S American production, with sizeable supply risks still in place amid uncertainty over stunt disease in Argentina and a slightly premature end to Brazil’s wet season. Soybeans are nearly perfectly valued at $11.40-11.60, basis spot, and new input is awaited. N Hemisphere climate patterns are abnormal and managed funds are estimated to be short 500,000 contracts of corn, wheat and soy combined.

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