- Midday Chicago values are mixed in slow volume with few traders wanting to add to their risk profile in a holiday shortened week amid the big unknowns of coronavirus and world energy prices. Chicago brokers report limited trading interest with corn sliding on US ethanol capacity shutdowns and negative feeding margins. Chicago wheat traders are watching Black Sea weather/logistics while the soybean market hopes for new Chinese demand for late summer/autumn.
- Chicago traders estimate that funds have sold 2,300 contracts of corn while buying 2,900 wheat and 2,400 contracts of soybeans. Soybean products feature fund selling of 3,100 of soymeal and buying of 3,200 contracts of soyoil.
- Weekly US grain export inspections for the week ending April 2 were; 50.0 million bu of us corn, 10.9 million bu of US soybeans and 11.8 million bu of US wheat. US corn exports were larger than expected while wheat and soybeans were in line.
- For their respective crop years to date, the US has exported 761 million bu of corn (down 449 million or 37%), 1,171 million bu of soybeans (up 64 million or 6%), and 764 million bu of wheat (up 51 million or 7%).
- China showed up as taking a very modest amount of US soybeans from the interior with its import demand being filled by S America through July. Research notes that Brazil was told by China on the weekend that it should stop blaming China for the virus with China threatening to take its business to the US if Brazil did not stop calling the virus the China or Wuhan virus. We note new Chinese interest in the US Gulf for late August/ September delivery this morning. The switch from Brazil to the US could be starting over the next few weeks.
- Mato Grosso Brazilian farmers report that its winter corn crop looks fantastic and they are expecting record yields as harvest starts in 5-7 weeks. The Brazilian corn crop is favourable through the north but challenged by dryness in Parana and portions of Santa Caterina. Some estimates suggest that Brazil will produce a total 2020 corn crop of 99.5-100.5 million mt. Amid Brazil’s reduced use of corn for ethanol, Brazilian corn exports will start to flow again in the last half of June and July.
- Brazil exported 3.35 million mt of soybeans to all origins last week or 123 million bu. This is down 7 million bu from the prior week but shows that Brazilian ports are functioning at a high level of capacity. China has been the big reason for the large Brazilian soybean exports shipping or securing a record 23.7 million mt since mid-February. China has been a huge taker of Brazilian soybeans since Feb 15.
- Russian sources report that truck and rail logistics improved late Monday. Russian officials became more liberal in handing out certification to make sure that trucks keep moving Russian grain for export and food for urban areas. We would doubt that Russian logistics on truck certification are going to pose a big problem to Russian grain loading during April.
- The Midday GFS weather forecast is wetter across the Gulf States and portions of the OH Valley, but otherwise unchanged. A few warm days will give way to a deep Low-Pressure Vortex that pushes southward across the Central US during the Easter weekend. Temperatures next week will average 6-18 degrees below normal with frost likely across portions of the Plains. Warming will occur west to east after April 19 as a High-Pressure Ridge builds across the Western 1/3 of North America and produces a more favourable spring planting outlook.
- Chicago corn is trying to find value amid the closure of 30-35% of the US ethanol industry amid favourable Brazilian weather. Soy futures appear “stuck” waiting on new crop buying from China. Wheat is a complicated market with Russian crops in ok shape, even amid recent dry weeks, waiting for rain and new export demand. Bull markets always let you in and rains are showing for SE Russia in the 11-15 day period. We anticipate choppy price action into Thursday’s USDA April WASDE report.