- Without a clear candidate to win the 2018 presidential election in late October/ November, the Brazilian Real is enduring selling pressure amid the lack of political leadership. No clear Presidential leadership or economic platform worries investors. However, the weakening Real is being cheered by farmers with old and new crop soybean bids approaching their best levels in six years. The Brazilian farmer is an active seller and planning to expand their 2018/19 soybean seeding by as much as 4-5%. A 2019 Brazilian soybean harvest of 120 million mt plus is therefore potentially possible.
- Chicago corn, soybean and wheat futures are mostly lower at midday as China trade concerns resurface along with favorable Central US weather. The fund buying has slowed in corn/wheat with funds turning sellers in soybeans. China (much of Asia) along with Europe is preparing for the May Day Holiday on Friday and early next week which will limit Chicago participation. Midwest farmers are rushing corn seed into the ground while spring wheat seeding is starting across the N Plains/Canadian Prairies. Amid funds that are already heavily long, the pressure on Chicago values is likely to continue into the close.
- Chicago brokers estimate that funds have bought 1,200 contracts of corn, while selling 2,200 contracts of wheat and 2,100 contracts of soybeans. In soy products, funds have bought 1,100 contracts of soymeal and 900 contracts of soyoil.
- Crush margins are still rising amid the concern of damage to the number six outloading facility in Argentina from a collision with a cargo ship yesterday. That facility is expected to be down for 3-6 months which could slow the export of Argentine soymeal until the repairs are completed.
- We hear from US exporters that China is closely scrutinizing US soybeans at port and is holding a cargo for testing. The result of the testing is expected in 3-4 weeks. The move has other Chinese importers nervous about the off-loading of US soybeans and their movement to the interior for processing. Amid the heightened US/China trade dispute, this action is a further blow to new US soybean purchases by China. No-one wants to secure US soybeans not knowing if there will be a tax to pay or if the soybeans will make it past CIQ (China Inspection and Quarantine) inspection. US soybean loadings to China are expected to nearly halt and US old crop soybean export estimates are likely to retreat.
- The weather forecast is drier across the W Midwest (in particular IA) when compared to the overnight run. Heavy rains are focused on the Delta and SW Midwest with a system mid next week. Temperatures look to warm over the next five days ahead of a cold front that passes southeast across the Central US. Highs will range from the 80s/90s across the Plains to the 70s/80s across the Midwest. Some severe weather is likely with the strong frontal pass next Tuesday/Wednesday, but we are not expecting inundating rain. This rain will not produce lasting seeding delay. The good news is that the N Plains and N Midwest will be dry for the next 10-12 days which will facilitate a active spring planting. The 11-15 day forecast is wetter and offers better rain chances for the Plains and W Midwest. Temperatures appear to be seasonal to slightly warmer than normal west.
- Chinese concerns are returning and there is waning optimism over talks next week in Beijing. US soybean sales and shipments are virtually on hold. This will add to old crop US soybean stocks. US corn is being planted at a rapid pace,