- HEADLINES: US farmer sells, cash corn pulls spreads and May corn off their highs; LDC exits Russian grain trade; USDA reports largest soyoil sale of the year.
- Chicago ag markets are mixed at midday with a modest correction from an early morning rally occurring in nearby May corn futures and the May/July corn spread on more active producer marketing. The rally in May corn and premium of cash corn basis ($0.33/over Central IL) pushed cash bids back near or above $7.00 which triggered a solid round of producer sales before the onset of spring planting. The farmer had the time and was waiting to reward a new chance to sell $7.00 cash corn in the Midwest. The morning cash selling sparked profit taking in the May/July corn spread which reached out $0.23/bu May premium. And the profit taking extended to May corn futures with the day’s trading range at $0.10 which also pulled soybean/wheat futures off their highs.
- Soymeal futures have been lower from the opening bell on oil share spreading with crude oil futures forecast to reach above $90/barrel by mid-year on tightening supplies as OPEC+ lowers daily production by 1.16 million barrels starting on May 1. The energy rally will underpin the bio-crops of corn and soyoil on corrections. It is not the time to chase a rally with the spring planting season in clear view. Yet, the new crop balance sheet cannot tolerate any supply disruption without sudden upside price adjustment.
- The USDA reported the sale of 20,000 mt of US soyoil sales to an unknown destination and 150,000 mt of US corn to Mexico. For now, it appears that the daily purchases of US corn by China have ended. Yet, the 20,000 mt soyoil sale is a bit of a mystery with US fob values well above S American offers by at least 11 cents/pound. There are reports of Argentine new crop soybeans being of poor condition with tiny green beans producing chlorophyll in crush operations. Some wonder if the US soyoil demand is due to worry over the quality new crop Argentine soybeans.
- The USDA reported that for the week ending March 30, the US shipped out 43.2 million bu of corn, 18.3 million bu of soybeans, and 6.2 million bu of wheat. For their respective crop years to date, the US has exported 762.5 million bu of corn (down 441 million or 37%), 1,670 million bu of soybeans (up 46 million or 3%), with wheat at 619 million bu (down 13 million or 2%). US soybean exports remain strong with China shipping 11 million bu or 61% of the US weekly total. Combined US corn, soybean and wheat stocks on March 1 were well below recent years with the US corn export program to China kicking into a higher gear from mid-April onward.
- LDC will halt its Russian grain export program as of July 1, joining other multinationals that will no longer be originating/elevating Russian grain. Four multinationals have left the Russian grain export business within a week. Russia has always wanted to be in control if its grain, and that is where this ends. The Russian ag ministry is going to great lengths to reassure buyers that it will remain a reliable world grain exporter.
- There are rumors that two 25,000 mt of Baltic/Polish wheat was sold into the Ardent Mills facility in Florida. The wheat is reported to be high protein 13.5% which will be milled for domestic consumption.
- Chicago brokers estimate that funds have bought 3,000 contracts of wheat, 3,500 contracts of soybeans, and 3,000 contracts of soyoil, while selling 3,400 contracts of soyoil and being flat in corn.
- The forecast is drier for the Plains over the next 2 weeks with limited rainfall for the drought-stricken areas. Snow totals were also diminished and pushed further north with the heaviest totals to impact E North Dakota and NW Minnesota. Much warmer temperatures arrive following the Easter weekend.
- It is not possible to get a sustained bearish price trend until trendline or above trend yields are confirmed in mid to late summer. Yet, with some timely spring seeding to be accomplished, this is a market that is taking 2 steps forward and 1 step back. Soyoil/KC wheat are upside leaders.