- HEADLINES: Chicago steady/higher at midday; Argentine corn production estimate trimmed; Crude at newer seasonal high.
- Midday Chicago values are mostly firm but off session highs. The addition of premium in wheat was warranted but few want to make long-term speculations on the pace of Russian wheat exports in Apr-June. Ukrainian corn fob premiums have eased slightly, and May corn once again struggled at its 50 and 100-day moving average as a planting window opens in the Plains/W Midwest mid-April onward. We anticipate a strong close, but key today/early next week is whether May corn can close above $4.38, May Chicago wheat above $5.68 and May soy above $11.85. On the week, corn and soy are down $0.08; May Chicago wheat is up $0.13/bu.
- We do note that spot Russian fob wheat offers have risen to $213/mt for nearby shipment, which compares to mid-March’s low of $198. It is tough to be bearish of wheat at current prices until/unless regular rain develops across the Black Sea region, which remains unlikely into April 20, while the loss of 1.1 million acres of US SRW mandates near ideal Midwest weather to keep end stocks stable. Temperatures in IL, IN and OH will be monitored this weekend and current forecasts project overnight lows of 29-31 degrees. Sub-28-degree readings trigger wheat stress.
- The Buenos Aires Grain Exchange this morning trimmed its Argentine corn production forecast to 52 million mt, vs. 54 previously and vs. USDA’s projected 56. The crop’s rating this week fell to just 17% good/excellent, vs. 22% a week ago. Damage from insect-carrying bacteria is cited, while heavy rain/thunderstorms in March were a negative in east/northeast production areas. BAGE’s and CONAB’s combined S American corn production forecast of 165 million mt sits 15 million below USDA’s and 8 million below last year. Most private Argentine crop estimates moved towards 52-54 million mt, vs. mid-season estimates upward of 58-60. Exporter corn production in calendar year 2024 is likely to drop 23-25 million mt amid reduced seedings in Brazil, the US and Ukraine.
- BAGE left its Argentine soy production estimate unchanged at 52.5 million mt, vs. USDA’s 50.
- Spot soyoil is up $0.40/lb amid further strength in crude and gasoline. Additionally, global vegoil/fat prices have moved higher in the last week, and unlike a year ago, soyoil’s premium to competing markets is small.
- At the time of writing spot Paris milling wheat is up €2.75/mt and spot EU rapeseed is up a sizable €9.50/mt. Needed dryness develops in Western Europe beyond early next week, with corn there typically planted in April. Spotty showers are hinted at in E Ukraine/C Russia, but rapid net soil moisture loss persists across core Russian winter wheat areas through April 20.
- The midday GFS weather forecast is a bit further east with soaking rainfall in the Southern US. 10-day accumulation of 5-8” will favour east LA and MS, but seeding delays will be widespread across the Delta region. The GFS forecast remains in agreement in calling for heavy showers across the E Midwest. The C Plains and southern Canada stay arid. Warmer temperatures develop beginning early next week.
- US, exporter, and world balance sheet changes, and price discovery, moving forward will be almost exclusively a function of weather patterns. El Niño is set to collapse in the next 45-60 days, which we would expect to bring about changeable/unpredictable weather patterns. It is still too early to chase large daily moves, but there is less tolerance for adversity amid reduced US cropped area. Wheat has the best story today if the Black Sea climate fails to change by mid-May.