- HEADLINES: Wheat rallies against 100-day moving average: Weekly corn exports strong; Brazilian winter corn progress.
- Wheat rallies sharply to 100-day moving average at $5.97 basis July Chicago where hedge selling is noted. A push above $6.00 July Chicago is unlikely until more is known about Western US Plains and SW Russian rainfall during May. Corn/soy follows with European corn planting to increase due to warming temperatures. Soymeal bear spreading reflects weakening US cash trend, Brazilian farmer selling additional stored soybeans. And 65-70% of the Brazilian winter corn crop either pollinating or soon to pollinate. Dryness for across North Central Brazil beyond May 5 can be a yield concern.
- Chicago corn, soy and wheat futures are higher at midday. Wheat futures have posted their best daily gain since November when China was securing US SRW wheat. The rally is based on supply worry for the US W Plains and SW Russia where 6 weeks of below normal rainfall have left parched topsoil. European and Russian wheat are ahead of normal maturity schedules on recent late winter and early spring warmth. However, it is a bit too early for the crop to be tremendously impacted by dryness. It is May and the first half of June weather that impacts Russian/European wheat yields. The last time that spot Chicago wheat was able to rise above the 100-day moving average was January 2, 2024. It is premature to chase a wheat rally on April 23 as rain can mend yields.
- Chicago brokers estimate that funds have bought 11,300 contracts of Chicago wheat, 6,400 contracts of corn, and 6,900 contracts of soybeans. Funds have bought 7,300 contracts of soyoil and a net 2,900 contracts of soymeal. US farm selling is stepping up in corn with Brazilian farmers selling soybeans.
- US export inspections for the week ending April 18 were; 63.9 million bu of corn, 16.0 million bu of soybeans, and 16.5 million bu of wheat. For their respective crop years to date, the US has exported 1,193 million bu of corn (up 26% or 312 million), 1,414 million bu of soybeans (down 18% or 314 million), and 604 million bu of wheat (down 8% or 53 million). If the US exports like amounts of soybeans vs last year into September 1, the final US soybean export total would be 1,678 million bu. WASDE will adjust its soybean export estimates downward more slowly.
- CONAB’s weekly crop progress showed that the progress of the second Brazilian crop reached where 80% of the crop is either pollinating or in the vegetative growth stage. This is right at the 5-year average with nearly 90% of Brazil’s soybean harvest now completed. The winter corn crop is in a vulnerable position if rains fail to return as the monsoonal flow has seasonally ended. The corn crop needs a few good rains with soil moisture largely depleted and much shorter than prior years. The point is that Brazilian weather matters for corn and a close eye should be kept on the future forecasts.
- Frost talk is circulating for S Midwest SRW wheat. However, it will take at least 7-12 days to confirm any damage. We suspect that damage if any was modest.
- Midday GFS weather forecast is wetter for the Eastern Plains and the Midwest with 1-3.00” rains for MO/IL/IA. The GFS forecast has shown considerable run to run variability which reduces our forecast confidence beyond the next 7 days. Limited rain is forecast to fall across the Midwest into Friday before showers/storms return with frequency. The rain will fall every 3-4 days with warming temperatures. Producers should be able to get seed in the ground this week, but the progress will be curtailed beyond the weekend. Temperatures will be warming across the Central US with highs in the mid 60’s to the lower 80’s. The warmth and rain will favour seed emergence. The EU model has been more consistent and close attention will be paid to see if rain reaches into the W Plains.
- It is a big rally day due to managed money being too bearish/short last week. The influence of a fund short can be seen in days like today. We do not see much changing fundamentally. Argentine farmers are more aggressive in cutting soybeans. Uncertainty surrounds Brazilian/Argentine corn crops (corn stunt disease losses in Argentina).