- HEADLINES: Chicago firm at midday; Independent forecasters raise Brazilian soy estimate and lower corn; US weather pattern stagnates.
- Ag markets at midday are mostly firm, with only soyoil weaker on crude’s modest correction as the world vegoil market’s rally pauses. Palm oil overnight fell 42 ringgits. Spot European rapeseed is down, with cash rapeseed oil in northern Europe flat at €950/mt. Rallies in May Chicago soyoil since mid-March have lost vigour at the contract’s 100-day moving average, but downside below $0.47 is low. It remains that the US soyoil must keep supplies in the domestic marketplace, which mandates premiums to other oils. We also note spot Malaysian palm oil doesn’t tend to score its seasonal peak until May.
- US export inspections in the week ending April 4 included 56 million bu of corn, vs. 58 million the previous week and vs. an average needed to hit USDA’s annual target of 34 million bu/week. Recall weekly USDA/FGIS data doesn’t capture the full extent of US corn demand amid enlarged truck/rail movement into Mexico. Physical corn export loadings are expected to rise further in the next 30-45 days. There is evidence to support a 25-50 million bu hike in annual shipments as US origin is still competitive with S American into early summer.
- US soy inspections were 18 million bu, vs. 20 million the previous week and unchanged from early April a year ago. We note the prior week’s shipments were revised upward 5 million bu. Wheat inspections totalled 18 million vs. 21 million the prior week. China loaded 56,400 mt of US wheat, mostly from the Gulf.
- For their respective crop years to date, the US has inspected for export 1,076 million bu of corn, up 35% year on year, 564 million bu of wheat, down 11%, and 1,381 million bu of soybeans, down 19%. USDA is likely to shuffle its total US soy disappearance in its April WASDE by boosting crush but trimming exports 25 million bu.
- Private forecasters updated Brazilian soy production, which figure has been raised to 145.5 million mt, vs. 143.9 previously, but still well below USDA’s 155. Total Brazilian corn production is estimated at 114 million mt, vs. 115 previously, as forecasters are less optimistic that safrinha area will be increased. CONAB’s acreage adjustment Thursday will be watched closely, but barring a major hike the global feed market is left with a Brazilian corn crop some 20-22 million mt below last year.
- Otherwise not much in the way of market changing news. Weather forecasts grab increasingly more attention as the calendar inches closer to May. Contacts suggest HRW conditions are fine today, but soil moisture loss will be rapid over the next two weeks as temperatures rise, and meaningful precipitation stays south and east of major producing areas. Yet, there is no threat to spring row crop planting west of the Mississippi River. Timely seeding dates lie ahead.
- The midday GFS weather forecast is consistent in allowing better rain chances into the Dakotas beyond April 15, but confidence over the placement and intensity of this event is low. Unwanted soaking showers persist across the Delta and far E Midwest. A rapid warming of temperatures occurs across the Southern and Central Plains this week.
- Choppiness continues. It is difficult to be bearish seasonally in spring, but a new clear supply threat is needed to accelerate speculative short covering. The duration of heat/dryness in the Plains needs watching.