- Chicago markets are higher at midday, driven by a more favorable macro landscape (crude is up $.30, the DOW up 300), and ongoing weather concerns in both hemispheres. There is a better understanding by the trade that proposed tariffs from both the US and China will not be implemented for some time. The GFS overnight weather forecast trended cooler, and the midday so far maintains a lack of needed warmth across the N Plains and bulk of the Midwest. And some 95% of the Upper Midwest is blanketed by several inches of snow, which is unusual on this date. Soil temperatures in IA, MN and the Dakotas rest in the 20s & low 30s; a year ago soil temperatures there were in the 40s and 50s.
- This week’s US Drought Monitor also showed a slight expansion in exceptional drought conditions across OK and CO, and still little to no rain is offered to the Western Plains into April 20. HRW yield concern has been well documented, but we reminds that producers in TX, KS, OK and CO intend to plant just over 9 million acres (11% of total) of corn there in 2018, as well as 5.6 million acres of soybeans
- Old and new crop US wheat export sales were disappointing at just 4 and 7 million bu, respectively. Sales of other ag production were in line with to above trade guesses, and world soy complex demand does appear to be shifting to the US and away from S America. Corn sales through the week ending last Thursday totalled 35 million bu, down from the prior week but still some 15 million above the pace needed to meet the USDA’s target. Total corn export commitments stand at 1,865 million bu, or a near record 84% of the USDA’s forecast. A 50-75 million bu hike in US corn exports is nearly certain. Bean sales through the week totalled 42 million bu, a record for this particular week (sales in late March typically range from 5-20 million). Total US bean commitments are now much better in line with the USDA’s forecast, and so perhaps no downward revision will occur in next Tuesday’s WASDE. Meal sales were a 9-week high 414,000 mt, and meal commitments also rest a near record high 81% of the USDA’s forecast, with half the crop year remaining.
- World wheat prices continue to move upwards, albeit slowly. An ongoing rail workers strike in France has pushed fob offers in France and Germany to new seasonal highs at $210-220/mt, still well below Gulf HRW offers but fundamental support is being raised to $4.80-4.90, basis July Kansas futures.
- The S America’s weather forecast remains much drier than normal across the southern half of Brazil’s safrinha corn belt through late April. It is not too concerning at present, but whether the wet season has ended there needs close watching. There are still a few weeks before the bulk of Brazil’s second corn crop begins pollinating, and a boost in soil moisture is needed in Mato Grosso do Sul and Parana, which typically produce some 45% of Brazil’s total safrinha crop.
- Attention has shifted from global trade issues to less than ideal weather in the US and Brazil, and more rain is needed in Argentina and Australia over the next 30 days ahead of wheat planting. A choppy marketplace will likely persist.