- HEADLINES: Ukraine export corridor talks to continue on Tuesday; Central US weather is cold with limited rain for the Plains; NOPA reports record March crush rate of 185 million bu.
- Chicago futures have been pushing upwards with the complex providing the bullish leadership. Corn/Chicago wheat have been following soy gains with KC wheat trading slightly in the red on Friday’s rainfall that aided the eastern 1/3 of Kansas. Chicago has a bullish undertow with cash basis levels holding firm. Corn and soybeans in Central IL are reported to have traded at $0.60 over July (both) on strong demand from processors. US ethanol demand stays strong while crushers are trying to extend their forward coverage of soybeans into early May. It is surprising how short bought end users are. The strong cash basis keeps pushing May/July corn and the July/November soybean spread.
- The May/July corn spread reached a new rally high of $0.34 over while the July/November soybean spread reached a fresh rally high of $1.73/bu over. The next upside price target rests at $0.40 over for May corn while analysis points to July/November soybeans trading more than a $2.00 July premium.
- There are only 9 trading sessions until first notice day against May futures and US farmers are showing new fondness for old crop cash sales. And limited soybean imports from Brazil are forecast as US crushers do not want to risk processing a S American soybean that produces soyoil that is not eligible for RINS or the carbon credits from CA/OR/WA. Any Brazilian soybean trade will be into the Eastern US where the oil will be used in feed or food consumption.
- Chicago brokers estimate that money managers have bought 3,700 contracts of soybeans, 4,600 contracts of corn and 2,500 contracts of Chicago wheat. In the products, funds have bought 1,500 contracts of soymeal and 2,700 contracts of soyoil.
- NOPA members crushed a record 185.8 million bu of US soybeans during March. This works back to NOPA members crushing a record 6.00 million bu of soybeans/day. The March crush was a 15-month high but fell short of the any month record at 186.4 million bu processed during December of 2021. March soyoil stocks were 1.851 billion pounds, up 42 million pounds from February, which was less than expected. The record soybean crush rate supplied the modest amount of additional soyoil. The onboarding of new renewable diesel plants and boosting capacity utilisation rates will draw down US soyoil stocks dramatically by mid to late summer.
- US export inspections for the week ending Apr 13 were 47.8 million bu of corn, 19.3 million bu of soybeans and 8.8 million bu of wheat. For their respective crop years to date, the US has exported 843 million bu of corn (down 465 million or 35%). US soybean export inspections stand at 1,714 million bu (up 23 million or 1.3%) with US wheat export inspections at 642.5million bu (down 22 million or 3%). Chinese shipments of US soybeans are set to seasonally slow with China taking 10 million mt of Brazilian soybeans during March and a like amount in April based on vessel loadings.
- The midday GFS weather forecast is like the overnight run with 2 weeks of cool to cold temperatures with limited rainfall for the Southern and Central Plains for the next 10 days. Any hint of moisture for the Plains has been pushed back until May, which will make April one of the driest for the S Plains in over 100 years of weather data. And cold/snow will be flying across the N Plains and the Upper Midwest into April 26. The chill will retard seed germination/emergence and the pace of seeding. The insurance date for seeding corn in N Dakota is May 20 or just 33 days away. And the next 10-14 days look cold with additional snow across North Dakota.
- The likely closure of the Ukraine export corridor with funds short over 100,000 contracts of Chicago wheat (5 year high), the seasonal increase in soyoil use for renewable and biodiesel use and the coming cold weather that could increase Prevent Plant acres in the Northern Plains all lean bullish. World exporter corn exporter stocks/use ratios could be record low in 2023/24.