• HEADLINES: May soymeal drops below 200 day moving average; Stats Canada calls for 1.3 million extra acres of spring wheat; US weekly ethanol production sags.

• Chicago ag markets are lower at midday with May soymeal futures falling below its 200-day moving average for the first time since October. The drop below the 200 day has produced additional long liquidation with July soybeans already trading well below their 50/100/200 day moving averages. The breaking of a key soymeal support level sparked additional selling with managed money estimated to be long just over 100,000 contracts. The decline in soymeal has pulled soybeans/corn lower in sympathy. Soyoil futures have rallied since funds are holding a sizeable net short estimated at over 33,000 contracts as of Tuesday’s close. Wheat futures continue to sag on the Plains rain but notice that Paris May wheat futures are higher (marginally) and bucking the US trend. Spot Paris wheat futures are holding above a downtrend line that extends back to 2019. Whether this support will hold will key the next price move in world wheat.

• Technically, Chicago is oversold on the charts, but few are willing to stand in front of the market until the 2023 corn/spring wheat and soybean crops are well along in their seeding pace. The warming weather forecast suggests that US farmers will be active in their spring seeding activities into mid-May.

• Chicago brokers estimate that funds have sold 5,400 contracts of corn, 1,500 contracts of soybeans, and 3,400 contracts of Chicago wheat. Funds sold 9,900 contracts of soymeal while buying 4,200 contracts of soyoil.

• It appears that few countries are willing to take cheap low quality Ukraine grain. Turkey has placed 130% import tariffs on imported grain due to the potential that cheap Ukraine grain could flood the Turkish market, much like it has done across Eastern Europe. Recent corn exports are done at $0.50/bu under Chicago July or $217/mt. This is below the cost of production in Eastern Europe and Turkey which adversely impacts local farmers. Ukraine milling wheat will not be available for export in volume until late July/August.

• Stats Canada released 2023 Planting Intentions today. Canadian farmers intend to seed 19.3 million acres of spring wheat (up 1.3 million acres), 5.50 million acres of soybeans (up 200,000) and 21.6 million acres of canola (up 200,000). Oat acres fell to 3.0 million acres, down 900,000 acres. Total seeded acreage was similar to last year, it is just that Canadian farmers seeded fewer other grains and lentils. The data was seen as bearish for Minneapolis wheat futures as it curtailed the need for large US HRS seeding this spring.

• US weekly ethanol production fell to 284 million gallons vs a weekly average estimate of 299 million gallons to reach the USDA annual forecast. US ethanol stocks fell 20 million gallons to 1,021 million gallons via the lower production.

• The ethanol production decline was twice what was expected. However, US gasoline consumption roared back by 9%. The fall in US ethanol stocks and sharp rise in gasoline use does not speak of a looming US recession.

• The midday GFS weather forecast is like the overnight EU model solution which raises our confidence. Additional showers of 0.25-1.50” will drop across Southern Kansas and over most of Oklahoma into the evening. Some of that rain leaks into Northern Texas. A secondary front produces showers Friday/Saturday before the entire Plains dries out. The next chance of a Plains rain is not obvious in the 12-day forecast. The N Plains and NW Midwest holds in a dry weather flow with warming temperatures. It is the E Midwest that will see the unsettled weather/rain into the weekend with another system mid next week.

• The Stats Canada data was bearish of wheat and Minneapolis futures are down accordingly. Chicago wheat has reached long term downside price targets at $6.35-6.45 basis July. It is the speculative selling in soymeal/soybeans that is not completed with additional downside price risk that drags corn along. Livestock buyers look to secure Dec corn at $6.40 for forward feed coverage. Dec meal below $390 is also cheap.  We believe that the US will import 50-600,000 mt of Brazilian soybeans and zero Brazilian corn through the summer.

• HEADLINES: Chicago weak but off session lows at midday; Midwest stays cold next 10 days; Macro market input leans negative.

• Chicago ag markets are lower at midday, but wheat, corn and soy have recovered moderately from morning lows. The collision of needed rainfall in the Southern Plains, which is imminent, the collapse in Brazilian corn prices and ongoing weakness in Brazil’s cash soybean market have triggered the rapid liquidation of length added since late March. Recent price action highlights clearly that amid tight US/global stocks and elevated prices, even small changes to market perceptions will have an outsized impact on daily and weekly price discovery.

• But it remains that record or near record US yields are needed to allow global balance sheets to loosen adequately, and it is just premature to shed the entirety of weather/risk premium. The growing season has just begun, and threats still exist in the form of latent spring wheat seeding in the US and Canada and the need for even more rainfall across the southern and western Plains over the next 45-60 days. Expect volatility well into late Jul/Aug. July wheat, corn and soybeans are all approaching oversold tech territory, and wide-swinging back and forth markets are expected into the release of the USDA’s May WASDE.

• Other breaking news is absent. The US dollar index is up 0.7%, with weakness noted in currencies in China, Russia, Brazil, Canada, and Australia. The Dow at midday is down 155 points. Spot WTI crude is down $1.40/barrel at $77.40. Spot Paris milling wheat is down €2.25/MT. Spot corn in Brazil is up a sizable $0.20/bu at $5.60.

• Radar maps show light/moderate rainfall working across KS & OK, with totals of 0.40-0.50” already recorded across small but important areas of E CO & W KS. This system intensifies in the next 48 hours, and the midday GFS weather forecast maintains widespread rainfall of 1.0-2.5” across the TX/OK panhandles, E CO and western KS into the weekend.

• Turkey will implement at 130% tariff on grain imports, including wheat and corn, from May 1, which will be in place until Turkey’s Presidential election on May 14. There are expectations that Turkish ag production will be up year on year, validated by current vegetation health. Polls still show that victory for current President Erdogan will be challenging, and import tariffs aside, the results of mid-May’s election will raise uncertainty surrounding Turkey’s role in EU-Black Sea geopolitics. Odds of an extension of the export corridor remain low, but like in recent months, until the deal is actually extended or terminated, markets will assume normality. Russian wheat exports in April look to be a record 4.5-4.7 million mt. Other wheat exporters will be left to fight for seasonally eroding import demand.

• The midday GFS weather forecast is similar to the early morning run in projected heavy rainfall across the Southern Plains, Delta and mid-South into Sat/Sun. However, the GFS forecast is drier in TX/OK in the 6-15 day period, and follow-up heavy Plains rainfall is no longer projected. Coming rainfall is incredibly important, but the degree/coverage of Plains drought is critical in measuring odds that a record national corn yield is feasible in 2023. Additional soaking rain is desired prior to late June when rainfall amounts being to weaken seasonally across the spine of the US. Dry but cold weather persist elsewhere, and below-normal Midwest temperatures have been extended into May 6-7.

• July Chicago corn, wheat, soy, meal and oil contracts have neared oversold technical levels, and a tradable bottom is due by mid-week. We doubt that a lasting trend can be found until N Hemisphere weather patterns are better understood. Cash market strength underpins breaks.

• HEADLINES: Chicago grain markets have traded sharply mixed this morning. The USDA announced China corn cancellations of 12.9 million bu of old crop corn, which has weighed on Chicago corn values and has pulled wheat futures lower. Soybeans were initially higher through the first hour but have slipped into the red at midday.

• The May/July corn spread reached a new rally high 52.75 cents overnight and is trading at an historic high for this date. The only other year that the spread has been higher was in 2021 when the spread reached 67 cents on the last day of April. Similarly, the May/July soybean spread has traded at 38.75 cents today. The only year that the spread was higher on this date was in 2013, when the spread traded 59 cents following the 2012 drought. The historic strength in spreads and basis reflects overall cash market tightness in both markets.

• After today, there are only 4 trading sessions until first notice day against May futures. Despite the narrowing window to move cash grain against May contracts, US corn and soybean basis remains robust across the Midwest, reflecting exceptionally tight cash grain supplies.

• Chicago brokers estimate that money managers have sold 7-10,000 contracts of corn, 3-5,000 contracts of Chicago wheat, and 2-3,000 contracts of soybeans. In the soy product markets funds have sold 3-5,000 contracts of soybean meal and 2-3,000 contracts of soybean oil.

• US export inspections for the week ending Apr 18 were 36.0 million bu of corn, 13.8 million bu of soybeans, and 13.4 million bu of wheat. For their respective crop years to date, the US has exported 880 million bu of corn (down 494 million or 36%), US soybean export inspections stand at 1,729 million bu (up 14.7 million or 1%), with US wheat export inspections at 656.5 million bu (down 18.6 million or 3%). US soybean shipments to China are set to seasonally slow as Brazilian soybean exports remain elevated into at least mid-summer.

• Snow cover in the Northern Plains and upper Midwest is historically large for this date, and although rare, it is not unprecedented. Climate Impact Company’s analysis of analogue years indicates that snow cover dissipation will not occur until May 5-7. The corn prevent plant crop insurance date for the region is May 20, leaving a somewhat narrow window to drain water, apply fertiliser, work ground, warm the soil, and plant a corn crop. The historically late snow cover increases odds that farmers will exercise the prevent plant crop insurance option, especially on the vast number of pasture acres that were intended to be pulled into production. Everything needs to work out perfectly to see all of the additional intended ND acres planted.

• The midday GFS weather forecast maintains broad rainfall coverage across much of the Midwest over the next 10 days. Coverage looks to be widespread, with cumulative rainfall totals of 2” expected across much of the region. High temperatures look to mainly be in the 50s and 60s for the rest of this week, with overnight lows dipping into the 30s and low 40s. It is a less-than-ideal outlook for planting summer row crops and cooler than desired for seeds already in the ground.

• Follow-through technical selling has weighed on Chicago markets at the start of the week, but December corn is funding support on the break below $5.50, while soybean bears have become reluctant to push their position under $12.75. Most of the planting season and the entire growing season is still ahead, and we caution against staying bearish on new crop prices at current levels.

• HEADLINES: Funds liquidate soy/soymeal position; Midday rain further east in the Plains; Regionalisation of world grain supplies.

• Chicago futures are sharply lower at midday with KC wheat/July corn pacing the decline as the forecast of meaningful rain is offered for the Southern and Central Plains for the first time in months. How much good the rain will do for HRW wheat yields is being hotly debated in the industry. Obviously no one will know for sure until the combines roll in June, but producer sources are pessimistic as crop insurance adjusters are active in zeroing out fields amid thin stands and the lack of tillers. Only time will tell how much good a late April rain will produce for HRW wheat.

• Long liquidation is noted in soybeans/soymeal as first notice day against May futures nears. Remember that speculators hold moderate net long position in both. The profit taking from stale longs has added pressure in a risk off day of trade. The back and forth in Chicago is frustrating traders as a trend longer than a few days has been fleeting. The “Chicago dance” since the start of the year has been fraught with sharp rallies and breaks not carrying through. We doubt that this break will carry through either as the US cash market firms and notice day looms. The May/July corn spread rallied to a new high of $0.40/bu this morning. The 2013 May/July corn spread reached a hefty $0.63 premium.

• Chicago brokers estimate that fund managers have sold a net 6,700 contracts of soybeans, 8,400 contracts of corn and 5,700 contracts of Chicago wheat. Funds have sold 3,800 contracts of soyoil and 4,200 contracts of soymeal. The funds have been active sellers across Chicago (and host of other commodity markets).

• US weekly export sales for the week ending April 13 were; 9.5 million bu of US wheat, 12.3 million bu of US corn, and 3.7 million bu of US soybeans. The corn and soybean sales were less than expected as S American offers undercut the US Gulf. For their respective crop years to date, the US has sold 681 million bu of wheat (down 27 million or 4%), 1,498 million bu of corn (down 732 million or 33%), and 1,851 million bu of soybeans (down 247 million or 12%). The US is highly non-competitive against Brazilian fob offers that are a record $1.85 cheaper.

• One reason why Chicago has been so choppy (and bull spreads so firm) is the regionalisation of key exporter’s supply. Brazil has harvested a record large soybean crop of 154 million mt which is 14 million larger than their prior record. The sheer size of the crop pressured cash basis levels to record low levels as Brazil’s logistical infrastructure strained. Thankfully, Brazilian soy export demand has been massive with China taking at least 10 million mt in March/April and potentially even May. This has helped Brazil deal with the massive crop. Yet, Brazil is still offering fob soybeans at $1.85 below the US Gulf!

• Yet, the US is struggling with tight soybean stocks and huge cash premiums of +$0.70/bu. This is why bull spreads gain, but flat prices are wildly choppy as traders shift their focus back and forth from the weakness of Brazil and the cash basis strength in the Central US.

• Eastern European/Russian wheat is also plentiful as the US/Canada running down old crop stocks with cash basis bids holding firm ahead of the harvest. How much of a premium does HRW wheat need to be priced relative to SRW? And world wheat prices are unmoved with Chicago/Paris futures providing the fireworks.

• The midday GFS weather forecast is further east with the Kansas/Oklahoma rain, than the overnight solution. Snow is widespread across the Dakotas with cold temperatures forecast to prevail into May. The combination of cold, rain and snow will keep the Midwest planting progress at no better than an average rate. However, ongoing seeding delays are expected across the N Plains and the Upper Midwest. Seeding delays are forecast.

• US farmers will not sell the Chicago break which is firming cash basis bids. Chicago will look back to the strong US cash markets on Friday and next week. Importantly, the Brazilian monsoon is fading some 2-3 weeks early . This places the late planted corn crop in Mato Grosso/Goias and Parana at risk. Don’t sell breaks or chase Chicago rallies is our best advice. Oil share should outperform into mid-summer.

• HEADLINES: Chicago futures mixed at midday; Soyoil firm on cash; Russian ag minister calls for smaller wheat crop; Brazilian political woes. Firming cash underpins soyoil futures as US renewable diesel demand grows; Oil share spread hints at a seasonal bottom; May-July corn futures push out to new rally high of $0.375 as cash basis remains strong; Chicago is in a price pattern of 2 steps forward and one step back into May.

• Chicago grains are mixed at midday with new demand underpinning values on the early weakness. The prospect of rain across the Plains with the market looking forward to the Russian Prime Minster Lavrov and UN head Gutierrez meeting early next week to decide the fate of extension to the Black Sea grain export corridor. Additional EU members are looking to seal Ukraine grain at their borders to control its flow. This sealing will slow Ukraine grain trade into the EU, but it will also help manage quality.

• Reports are widespread that the corn coming into Eastern Europe is of very poor quality, which further presses cash bids. The only help is that Ukraine 2023 corn/wheat production will be down substantially on the back of high costs and a lack of finance/capital to seed the new crop. We guestimate 2023 Ukraine corn production at 14-17 million mt which along with a 30 million mt Argentine crop, will focus world demand on Brazilian corn into October. It is Brazil that will be suppling most of world corn/soy trade in the months ahead. Brazil feeds the world!

• Chicago brokers estimate that fund managers have sold a net 900 contracts of soybeans, 2,100 contracts of corn and 3,900 contracts of Chicago wheat. Funds have bought 1,800 soyoil while selling 2,500 contracts of soymeal.

• Brazilian President Lula has been on an international tour trying to boost Brazil’s trade. However, film clips were released this morning show the insurrection that occurred in early January of 2023 (much like Trump in January of 2021) and the chaos that followed. The difference is that the Brazilian film clips show members of the Brazilian military involved, which has the Congress calling for an investigation and potential impeachment trial of Lula. The Brazilian Real quickly declined to 5.05 vs 1 US$ on the news. The Brazilian soybean harvest has reached past 86%, and sales are slowing. April Brazilian soybean exports are forecast at a record 15-16 million mt, a bottom in the record low basis bids of recent weeks is forecast on the record demand that prevails.

• The Russian ag minister estimated that Russia will harvest 123 million mt of grain including 78 million of wheat. The wheat production estimate is well below the 83-86 million mt which many others estimate. The ongoing and more difficult question is what last year’s harvest with the Russian’s claiming a harvest of 104 million mt and USDA at 92.0 million. We see last year’s Russian crop as closer to 96.0 million mt, but there is widespread debate not only on this year’s potential crop size, but also carry in supplies. Russia as of today has exported 40 million mt of wheat, a record.

• The midday GFS weather forecast is drier for KS/NE/OK than the overnight run with the bulk of the rain being pushed further south into Central Texas and the Gulf of Mexico. Snow looks to become more widespread across the Northern Plains targeting North Dakota. The combination of cold, rain and snow will keep US spring planting progress at no better than an average rate. However, ongoing seeding delays are expected across the northern tier of US states on the chill. The prevent plant date for North Dakota on corn is May 20, just 31 days away.

• Soyoil futures will continue in a bullish trend on firming cash and diminished US future crush rate. December corn will closely monitor North Dakota weather as corn planting delays will worsen. Grain loading strikes in Canada and Argentina need to be closely monitored for delays. We hold a statistical bullish view on Chicago corrections into mid to late May.

• HEADLINES: Soyoil soars on fund buying and record large domestic demand; HRW wheat futures trade Plains weather; Brazil to produce green diesel. Poland and Ukraine reach deal on transiting grain through Poland as cargoes to be sealed; Russia’s Prime Minister Lavrov to meet with UN Chief next week on grain corridor extension; Brazil’s President Lula signs $12 billion green diesel deal with Saudis.

• Chicago futures are mixed at midday with soyoil futures sharply higher on renewable diesel demand, while wheat/soybeans sag on rain prospects for the Central Plains and profit taking. May corn futures reached initial upside chart targets at $6.80-6.90 while May soybeans tested the old highs above $15.30. The May/July corn/soybean spreads have also endured weakness on profit taking. However, cash basis bids are unchanged with Central IL bidding $0.60 over July for spot cash corn and $0.65 over July for spot cash soybeans. Farmers have not shown a willingness to sell amid cold/unsettled weather forecasts. Most farmers will wait until after their crops are seeded to shed additional old crop supply. We look for a mixed close, but we doubt that either May corn or soybeans or May/July corn/soybean spreads have scored their final highs. Such highs would require an increase in old crop cash grain movement which has not been detected today.

• Chicago brokers estimate that fund managers have bought 1,700 contracts of soybeans, while selling 3,500 contracts of corn and 2,900 contracts of Chicago wheat. In the products, funds have bought 3,600 contracts of soyoil while selling 3,900 contracts of soymeal.

• Brazilian President Lula has signed a green diesel deal with Saudi Arabia for an investment amount of $2.4 billion dollars starting in 2024 to produce green (renewable) diesel and jet fuel. The investment is due over 10 years with the construction of a new refinery plant to begin in early 2024 in Bahia. The new plant will have the capacity to produce 1 billion  litres (20,000 barrels) per day with production to start in late 2025 or early 2026. Initially, soyoil will be the main feedstock due to the sheer size of the plant which could use up to 900,000 mt annually. Longer term, it is hoped that 100-150,000 mt of cornoil and animal fats will also be converted. The project is the first bioenergy investment by the Saudis and are being trumpeted as aiding Brazilian agriculture by the Lula Administration.

• Poland and Ukraine have verbally committed to a deal that Ukraine grain will be sealed at the border to be transited through Poland and then exported. This export blueprint is expected to be followed by other Eastern European countries that border with Ukraine for the protection of local farm profitability. Ukraine grain may be monitored throughout EU until it is consumed.

• Russian Prime Minister Lavrov will meet with UN Head Gutierrez late next week to discuss why Russia is not allowing Ukraine grain vessels to be inspected for export. A push will also be made for an extension of the Black Sea Corridor Initiative beyond May 18. We are currently pessimistic that the West will curtail or end economic sanctions as requested by Russia for its ag sector. Lavrov appears less favourable on the grain corridor extension.

• There is a risk of a frost/freeze for Parana and Northern RGDS in coming mornings. The freeze would catch corn in its early growth stages. Watch S American temperatures closely in the next few days with the coldest morning looking like April 21.

• The midday GFS weather forecast is more like the EU model overnight with improved rain chances for Kansas late in the forecast period. The moisture this week is too far to the east to benefit HRW wheat with extreme heat felt again today.  More cold/snow will be flying across the N Plains and the N Midwest into April 26. The chill retards seed germination/emergence and the pace of seeding. the midday run stays chilly into May.

• Soyoil futures should continue in a bullish trend due to record large US domestic demand and slowing monthly crush. Plains weather keys HRW wheat, while corn could be the sleeper as 2023/24 world stocks/use ratio declines to a potentially record low level.

• 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.

• HEADLINES: China buys more US corn, does China know that the Ukraine grain corridor will be closed. Frost/snow follow summer heat in NW Midwest; Central Plains drought worsens.

• Chicago futures are mixed at midday with the grains higher while soybean/soy product prices sag. It has been a back and forth morning with corn showing independent strength due to strong cash markets. And China booked an additional 382,000 mt of US corn for old and new crop which we understand are switches from Ukraine. The Russians/Chinese have a cosy political relationship which has some wondering if Russia is informing China that the Ukraine Grain Export Corridor will be closing on May 18.  Since yesterday, China has booked 709,000 mt of US corn including 450,000 mt in an old crop position and 259,000 mt for new crop.

• Soybeans are being pressured by news that 1-2 boats have left Brazilian ports and heading for the SE US Coast. These sales were completed and talked about several weeks back. It is not unusual that Brazilian soybeans work into the SE US Coast. The oil processed from these beans will likely be used for food, not renewable diesel. S American soybeans or soyoil are not approved for CA/OR/WA renewable diesel credits and there is a 19% tax on S American soyoil being imported into the US.

• Chicago brokers estimate that money managers have sold 4,700 contracts of soybeans while buying 5,500 contracts of corn and 3,500 contracts of wheat.  In the soy products, money managers have sold 4,500 contracts of soyoil and 2,100 contracts of soymeal.

• China has secured 8.5 mt of US corn for the 2022/23 crop year. China’s recent day new crop corn purchases are the first for them. There is 2.4 million mt of US corn sold on an unknown basis and recent history indicates that about half of that corn will be switched over to China. If 1.2 million mt of US corn in unknown is switched to China, total US corn sales to China would equal 9.7 million mt. In total, US exporters estimate that China will take 12-13 million mt of old crop corn from the US, 4-5 million from Brazil and 4-5 million from others for net 2022/23 import total of 20-23 million mt this crop year. This compares to the WASDE annual corn import forecast of 18.0 million mt. China continues to be active in booking Brazilian soybeans and world corn. The doubt is that Ukraine will be able to export China 1.0 million mt of corn from 3 ocean ports.

• NOPA will be out on Monday with their March member crush data. It is expected that NOPA members processed 182-184 million bu of soybeans, compared to 182.4 million last year. In February, NOPA processed 164.4 million bu or soybeans or an average daily run rate of 5.87 million bu. The same daily run rate for March would forecast an annual crush rate of 182.0 million bu. WE would estimate US soyoil stocks falling to 1.79 billion pounds, down slightly from February stocks of 1.809 billion pounds and down more than 100 million pounds from last year’s 1.908 billion pounds.

• The midday GFS weather solution is like the overnight run with rain starting this weekend before a much cooler outlook unfolds into April 22, which produces a new frost/freeze threat across the Plains and the NW Midwest. Snow is forecast across CO/NE/W IA/MN and WI with accumulations of 2-10” between April 22-24. Warming follows which is followed by another cool onslaught to end the month.

• Rain chances start this weekend across the N and W Midwest with totals of 0.25-1.25” with another system in the last half of next week with rainfall totals of 0.4-1.50”. Both systems will provide a needed shot of moisture for the Western Midwest. However, MN would appreciate dry weather to limit the flooding from snowmelt. Unfortunately, the chance for rain across the Plains is limited into May which deepens the drought.

• Today is a step forward in the dance with Chinese demand for corn and cold temperatures and the ongoing drought rallying wheat. Monday’s NOPA report will be key for soyoil to see if demand can outpace production for the second consecutive month. Biofuel demand for vegoils is seasonally increasing now and a double low should be formed in soyoil futures. We are bullish grain/soyoil on technical breaks.

• HEADLINES: China buys US old/new crop corn; Midday GFS weather forecast has limited rain for NE/KS next 10 days; Brazilian soybean basis bottoming.

• Chicago futures are mixed at midday with soymeal higher while wheat futures sag on the EU model’s forecast of rain for Kansas/Nebraska next week. Corn and soybean futures are caught in between and trading both sides.

• Funds were aggressive sellers of wheat from the onset which has tugged corn/soybeans off their early highs. Everyone wants to be ahead of the Kansas/Oklahoma rain as US wheat futures have reached sizeable premiums to EU/Black Sea fob offers. The competitive nature of the world wheat market will add to US futures market volatility. We look for a mixed Chicago close with the bullish structure of old crop futures getting more bullish on the US corn sales to China and falling Argentine crop size. Chicago is a market of two steps forward, and one step back.

• Chicago brokers estimate that funds have sold 5,500 contracts of wheat and 3,400 contracts of soybeans, while being sellers of 1,200 contracts of soyoil. Funds are flat in both soymeal and corn. In corn fund managers were aggressive early buyers and then sold back their length on the break.

• US export sales for the week ending April 6 were 5.0 million bu of wheat, 20.8 million bu of corn, and 13.4 million bu of soybeans. For their respective crop years, the US has sold 671.5 million bu of wheat (down 35.4 million or 5.0%), 1,486 million bu of corn (down 710 million or 32%), and 1,847 million bu of soybeans (down 234 million or 11%). The weekly US corn, soybean and wheat sales pace was a touch lower than expected and was considered slightly bearish.

• FAS/USDA announced that China purchased 327,000 mt of US corn in its daily sales reporting. Of the total, 191,000 mt was for old crop and 136,000 mt for new crop. Several US exporters commented that the China purchase of US corn was a swap from an existing purchase from Ukraine. Worry is growing that the Ukraine Export Corridor deal will not be extended beyond mid-May. China has an estimated 1.0 million mt of Ukraine corn exports to ship during June and July. Should the corridor close, this business could be swapped to the US and Brazil. Today, a corridor extension is looking doubtful with Russia suggesting that the deal may be over.

• Argentine farmers are slow sellers of cash soybeans under the Soybean Dollar program that started on Monday. Daily soybean sales of 200-300,000 mt will not satisfy domestic crusher or Government demands for tax/currency. It is doubtful that the cash soybean sales pace will increase with inflation running 100% annually. Argentine farmers would rather hold cash corn/soybeans and only make sales when cash flow needs cause Soybean Dollar sales.  Brazilian soybean basis levels have stabilised and are forecast to rally next week on strong demand and limited farmer seller.

• CONAB estimated the 2023 Brazilian soybean crop at 153.6 million mt and the corn crop at 124.9 million mt, right at recent USDA forecasts. The Brazilian corn area is likely to come down due to abandoned planting intentions in Parana due to excessively wet weather. The Brazilian Real has rallied to 4.90:1 US$ which is hurting Brazilian farm profitability. A continued rally in the Brazilian Real would end the push for new area expansion by Brazilian farmers.

• The midday GFS weather solution is further north and east with rain across the Lake States, which leaves the Southern and Central Plains with a deepening drought. Snows are forecast across IA/MN and WI on the weekend with accumulations of 2-10”. Warming and dry weather follows which will produce a rapid snowmelt. A second potent storm is due late next week which produces 0.5-2.00” of rain across IA/MN/WI. Temperatures are cool next week with limited precipitation for the Central and Southern Plains HRW wheat.

• Don’t get caught into thinking that a new bearish trend is developing today. It is two steps forward and one back amid favourable seeding weather for Midwest corn and soybeans. Any new rain for MN or the Dakotas is unwanted amid snowy and saturated soils. Our message remains the same, “don’t sell breaks”.

HEADLINES: Bull spreads rule on cash strength and forward Chicago wheat roll; Snows again for IA/MN this weekend; China swaps for US soybeans from Argentina.

• Chicago futures are mostly higher with soyoil being dragged to the downside on oil share spread unwinding. Strong cash basis bids are underpinning nearby May corn/soybean futures while wheat values rise on the potential closure of the Black Sea export corridor and the deepening drought across the C and S Plains. The market has been choppy, which is limiting trading volume. We look for a mixed to mostly higher Chicago close with open planting weather and bull spreading pressuring new crop corn/soybean futures. The battle is between tight old crop supplies and bearish new crop planting weather.

• The US Labor (sic) Dept showed the US Consumer Price Index rising 0.1% in March, with an annualised rate of 5%. Excluding food and energy, the core CPI rose 0.4% in March and 5.6% annualised. The March 0.6% gain in housing costs was the smallest since November. The modest rise in the CPI implies that the US Central Bank could raise its lending rate by 0.25% in early May or wait for the annualised rate of the CPI to decline in coming months. The point is that the US Central Bank is nearing an end of its rate hiking cycle, which is bearish for the US$. The US dollar is in a bearish trend which should accelerate.

• Spreading in wheat has been massive overnight and during the day session. Funds are moving their short position forward as the Goldman roll is ongoing. Funds have spread at least 14,000 contracts of May/July wheat. The bull spreading in Chicago wheat has spilled over to corn and soybeans amid the strong cash markets. Today’s Chicago price action has been more about spreading than flat price trade.

• Chicago brokers report that funds have bought 2,400 contracts of Chicago wheat, 2,700 contracts of corn, and 4,200 contracts of soybeans. In soy products, funds have bought 1,000 contracts of soymeal and sold 4,300 contracts of soyoil.

• The weekly EIA Biofuel report showed that 282 million gallons of ethanol were produced last week, which is down 4% from last year. The US needs to produce 299 million gallons of ethanol per week to achieve the USDA annual usage forecast of corn. US ethanol production margins have surged and are at their best levels since May of 2022. US ethanol production seasonally gains into July. US gasoline demand is holding strong at 8.94 million barrels/day with US gasoline stocks down 5% from last year at 222.2 million barrels. The driving season is ahead with energy prices tending to rise into early June.

• There are rumours that soybean sellers to China are swapping Argentine soybeans for old crop US soybeans due to quality. A cargo sold yesterday, and another has this morning. Argentine crop quality issues abound with soy crop estimates in decline due to disappointing early yield data. China is importing the soybeans for their reserve and there is a timeline on when these imports must arrive.

• The GFS weather forecast at midday is colder/wetter for the NC US with 2-12” of snow projected to fall across portions of IA/MN this weekend. Snow amounts lessen into WI with low 30’s to produce a frost southward into S IA and C Il on Sunday/early Monday. Warming and dry weather follows which will produce a rapid snowmelt. A second potent storm is due late next week which produces 0.5-2.00” of rain across IA/MN/N IL/WI. Temperatures stay seasonal through April 25t with limited precipitation for the Central and Southern Plains HRW wheat.

• It has all been about bull spreading in wheat/corn and soybeans. The Brazilian Real has fallen to 4.94:1 US$, the strongest level for the Real in years. This has shut off Brazilian farm sales as cash soybeans in real terms are down 20 cents/bu vs the recent day Chicago rally. The falling US$ has fund managers looking at commodities once again for new investment.