- HEADLINES: Chicago grain trade turns slower and lower ahead of USDA reports.
- Chicago grain markets were weaker overnight and were under early pressure at the morning open but have moved off the lows after an early burst of fund selling. Market news has been limited at midweek, and trading has largely developed around the upcoming USDA reports. Wheat has led the morning recovery and traded in the green for much of the morning, soybeans have clawed back some of the overnight losses, and corn has, at times, tried to work back to unchanged.
- May corn has been under technical pressure this week after stalling against the 50-day moving average last week, which weighed on May Chicago wheat in the first half of the week. May soybeans found support on a test of the 50-day moving average this morning.
- Chicago brokers estimate that funds have been light sellers of 2,000-3,000 contracts in the corn market, sellers of 1,000-2,000 contracts in soybeans, and have bought 2,000-3,000 contracts of wheat. In the soy product markets, funds have sold 2,000-3,000 in soybean oil and bought 1,000-2,000 contracts of soybean meal.
- The EIA’s weekly Petroleum Status report showed that ethanol production last week rose 1% from the previous week and reached a 3-week high of 1,054 thousand barrels/day. This was the most in 3 weeks and marked the eighth consecutive week that ethanol production was above a year ago. Cumulative ethanol production from the start of the corn crop marketing year is up 4.4% from last year, and cumulative production for the 2024 calendar year is up 3%.
- Other market news has been limited this morning, with the trade awaiting key USDA reports on Thursday. The average trade estimate calls for 2024/25 corn acres at 92 million acres (94.6 last year), 86.3 million soybean acres (83.6 last year), and 47.7 million wheat acres (46.9 last year). Combined corn, soybean, wheat, and cotton acres are projected to fall by 734,000 acres from 2023.
- The midday GFS weather forecast update shows rains falling across the upper Delta and Eastern Corn Belt states over the next 10 days, with snow projected across the Western Plains and upper Midwest regions. Below normal temperatures continue across the northern Plains and Midwest this week, with a widespread warming trend to get underway at the end of next week.
- Limited rains are projected for the driest parts of southern Brazil in the next five days, where they are most needed for the recently planted Safrinha corn crop. The forecast adds better rains in the 6-10 outlook but leaves several dry pockets in South Brazil and west Paraguay.
- Summer row crop prices have corrected in technical trade and limited demand ahead of the USDA’s Prospective Planting and March Grain Stocks report. Funds still hold sizeable net short positions in all Chicago markets, with the trade prepared for bearish stocks numbers. In tight stocks years, the stocks figure drives the Chicago price response. In ample stocks years, it is the planting intentions figures. Nearly 1 million acres were added to CRP in the last year, and the key question to be answered on Thursday is the extent of the decline in total crop acres.