• HEADLINES: Wheat trades lower; row crops firm; GFS weather forecast maintains needed Plains rainfall.

• Wheat futures in the US and Europe are weaker while row crops look to end flat ahead of the long weekend. Weather risks will be added to weekend Ukrainian war headlines moving forward, and while there is little hope for a ceasefire the potential for needed warmth and dryness across the Midwest in late April/early May will be monitored closely over the next 72 hours. We look for limited changes into the close.

• US export sales through the week ending April 7 were solid but generally aligned with previous expectations. Corn sales through the period totalled 51 million bu, vs. 31 million the previous week following the inclusion of recent Chinese purchases. Sales in the week ending today are expected to exist in a range of 45-55 million bu, and so weekly corn sales between May and August must average only 14 million bu. Pace analysis along with Census trade data to date continues to point towards final US corn exports in 2021/22 of 2,700+ million bu, vs. USDA’s projected 2,500 million. We would note that Canada as of April 7 has secured a record 143 million bu of US corn, vs. 24 million a year ago and which accounts for 96% of the USDA’s annual Canadian import projection. Canada is expected to remain a rather large buyer of US corn until new grain harvests become available in early autumn.

• Soybean sales in the week ending April 7 were 20 million bu, vs. 29 million the prior week. World demand will be split between the US and Brazil in the May-Jul period, but US soy export commitments currently stand at 2,081 million bu, 98% of the USDA’s forecast. Soybean sales pace analysis suggests USDA’s forecast is still 75-100 million bu too low. The US also remains fairly active in the vegoil market, with soyoil sales totalling 14 million lbs, unchanged from the prior week. Total US soyoil commitments of 1,423 million lbs account for 83% of the USDA’s forecast will a full 25 weeks remaining in the marketing year. US soyoil exports, too, must be raised by 75-100 million lbs.

• Other input leans supportive. Spot WTI crude is up $0.25/barrel at midday. The Buenos Aires Grain Exchange on Wednesday pegged the corn crop at just 20% good/excellent, vs. 21% the previous week. Argentine soybean good/excellent is 23%, vs. 25% the previous week. Argentine corn production estimates remain below 50 million mt, vs. The USDA’s 53. This is a small but important difference.

• The long-term outlook remains bullish as the market’s chore of replacing Aug-Dec Black Sea grain exports will be impossible. But new purchases/long positions are only advised on corrections. We estimate that managed funds today are long a net 385,000 contracts of corn and 180,000 contracts soybeans, both sitting at 12-month highs.

• The midday GFS weather forecast maintains high odds that needed rainfall reaches into OK, KS and CO April 23-25. Warmer temperatures are also forecast to blanket the Central US in the 8–15-day period. High temperatures east of the MS River are forecast to reach into the 60s and 70s. We note that the GFS model has been somewhat erratic over the last 24-36 hours, but the midday Canadian model does agree that warmer temperatures and a western expansion of rainfall are probable in the final week of April. Forecast changes, or lack thereof, will be important over the long weekend.

• Day-to-day price action moving forward will be a function of Central US weather outlooks and the extent that S American exporters can begin trimming the US’s share of global feed trade. We expect choppier markets as the new N Hemisphere growing season begins in earnest. But war in Ukraine and broad inflationary trends remain top priorities in long-term fair value. Breaks will be brief/shallow until there are signs of demand rationing. It is also critical that extended US weather forecasts fully materialise.

• HEADLINES: GASC wheat sale happens $150/mt more than a tender nearly 2 months ago; Paris wheat rallies strongly.

• Chicago futures are mixed at midday with wheat and new crop corn futures pushing higher while old crop corn/soybeans sag. Soyoil futures and May corn are against prior contact highs while the wheat market adds premium for arid Plains weather forecasts. Chicago will be closed on Friday for the Easter Holiday weekend and traders are adjusting risk accordingly. It is Central US weather and the Russian war against Ukraine that holds sway over Chicago values next week. We look for a mixed to higher close with US weekly export sales to be large for corn on Thursday.

• Paris wheat futures have rallied strongly (easing back by close of business) as traders understand that importers and millers will increasingly turn to the EU for future wheat needs. Black Sea fob offers may be cheaper, but insurance and freight costs will make this war origin prohibitively expensive. And there is a risk that NATO members may add Russian oil/wheat to their sanctions list. The risk of Russia wheat is sizeable both on a CIF cost and execution basis.

• Chicago brokers estimate that funds have sold 2,100 contracts of corn and 3,200 contracts of soybeans, while buying 1,500 contracts of wheat. In soy products managed money has sold 2,300 soymeal and bought 4,300 contracts of soyoil.

• Egypt’s GASC secured 290,000 mt of EU wheat (240,000 mt of French and 50,000 mt of Bulgarian wheat) at a fob cost that ranges from $449.50-451.75 which equates back to $480-494.25 CIF using freight costs of $30.50-42.50/mt. GASC also secured 60,000 mt of Russian wheat at $460/mt CIF. We hear that the fob sale price on the Russian wheat was $380/mt with the estimate on freight costs at $80/mt. GASC paid nearly $150/mt more for wheat than its last tender that was nearly 2 months ago. The rise in price must be eye watering to the Egyptian buyer.

• US weekly ethanol production fell slightly from last week to 293 million gallons vs 295 million gallons. This production is up 6% from last year, but slightly below the weekly average needed to reach the USDA’s revised yearly forecast of 5,375 million bu of corn. The good news is that US ethanol stocks fell 46 million gallons to 1,042 million which is up 21% from last year. US blenders are enjoying their best margins in years at $0.08/gallon. This should boost demand going forward. Brazilian ethanol prices continue to soar which should boost imports from the US with ethanol cheaper than unleaded gasoline.

• The midday GFS weather forecast is consistent with ongoing arid weather across the Southern and Central US Plains with additional snow to accumulate across North Dakota and the northern third of Minnesota. Cool to cold temperatures will prevail into April 24 which will slow seeding and seed germination. A brief warm up follows. The planting window is pushed forward to the last days of April and early May. The extended range forecast places rain in the 11–15-day period across the Eastern Plains, leaving key western wheat areas in a deepening drought. Cold air pours southward into the Central US in the closing days of April keeping spring planting progress slow.

• The Russian war rages on with Putin commenting that any cease fire/peace accord is nearly dead. The Russians are building military might to the west of the Donbas. Ukraine spring seeding is reported to be slow. Getting Midwest corn seed in the ground has been challenging with cold temperatures to restrict germination. Chicago will remain highly sensitive to Central US weather following the Easter Holiday. We maintain a bullish outlook with Central US weather far from perfect and Chinese soybean supplies tightening.

• HEADLINES: Inflation runs hot for March at 8.5%; GASC allows other wheat sellers; Biden announces E15 in vote of confidence.

• Chicago futures are strongly higher at midday with corn, soybeans and wheat all trading to hefty daily gains. The volume of trade expanded with the rally as new investment enters the commodity space in line with the March US inflation rate of 8.5%, the highest in 40 years. Investment funds see commodities as a partial hedge against inflation. Diversification into commodities is being advised by a host of wealth advisors and hedge fund managers.

• And the decision of the Biden Administration to allow the use of E15 to lower unleaded gasoline prices was a vote of confidence for the renewable fuel. There was worry as world food prices soar, politicians would pull back on their green fuel pledges. Today’s Biden’s decision to allow E15 to lower fuel costs ended any nearby concern that food will take precedence over fuel.

• Chicago stays in a bull trend trying to gauge Central US weather conditions for spring planting and the ongoing Russian war.

• Chicago brokers estimate that funds have bought 3,100 contracts of wheat, 5,500 contracts of corn, and 2,600 contracts of soybeans. In soy products, funds have bought 3,100 contracts of soyoil and 2,200 contracts of soymeal.

• For the first time since 2013, spot cash corn bids reached $8.00/bu in the W Midwest with ethanol producers bidding up for nearby needs. To date, $8.00 cash corn in NW Iowa and C Illinois has not sparked much new cash corn movement. It is new crop where farmer selling is focused as new crop cash corn nears or exceeds $7.00/bu. The basis bids for new crop are discount, but they are premium for old crop as supplies tighten.

• No new daily export sales were reported by FAS, but Thursday’s Weekly Export Sales Report is expected to show sizeable new corn/soybean demand. China’s 1.0 million mt corn purchase of last week will be included which should produce a weekly sales total of 1.8-2.0 million mt. Soybeans will also be robust on Chinese interest. China has been securing Brazilian soybeans in recent days on their discount.

• Egypt’s GASC has said that it will now accept wheat offers from Russia/Ukraine and Eastern Europe in its latest tender that closes tomorrow. The tender originally called for just EU wheat, but sellers can also submit offers from the more traditional sources of supply. Whether GASC will be willing take the risk on Black Sea wheat execution will be seen. GASC is also said to be looking at Indian wheat purchases, but their aversion to Karnal Bunt, a fungal disease is likely to prevent India from being an origin.

• Russian President Putin indicated that Russia would press Ukraine until their goals are fully met. Putin persists that the war is going per plan. Anew Russian offensive appears to be preparing for Eastern and Southern Ukraine with capturing the Donbas as being the initial military goal. And whether a poisonous substance was dropped into Mariupol, Ukraine is under investigation. The Russian war rages with atrocities against Ukraine civilians having a serious negative impact on the peace/cease fire talks. The Russian war appears to be lengthy, with few aware of Putin’s final goal.

• The midday GFS weather forecast is consistent with ongoing arid weather across the Southern and Central US Plains with heavy snows to drop across North Dakota and the northern half of Minnesota in the next 48 hours. Cool to cold temperatures prevail across the Central US into April 24 which will slow seeding and seed germination. The planting window is pushed forward to the last days of April and early May.

• There is no sign of demand rationing in wheat, corn, or soy via high and rising prices. US cash soy crush margins are profitable by $1.90/bu, livestock feeders have margin as do US ethanol producers. Chicago must reach values that spark demand rationing, which has not yet occurred. Adverse weather only adds to any existing bullishness. The market risks stay bullish heading into an extended holiday weekend.

• HEADLINES: Sharp gains in wheat, sharp falls in soybeans mark Chicago at midday; Central US weather too dry for the Plains, too cold for the Midwest.

• Chicago futures are mixed at midday with the grains higher while the soy complex sags on profit taking and the fear that Covid is slowing Chinese import demand while cool/wet weather could add to already record large 2022 US soy seedings. Moreover, reports abound that as the Midwest insurance revenue calendar moves allow the ability to plant corn (April 10-15), Midwest farmers are struggling to secure/receive all their fertiliser/chemicals. Several Midwest farmers report that they will spread out their input supplies over more acres. This could be averse for yields. Others might side-dress nitrogen in the future. Each adds to agronomic/yield risk. A mixed Chicago close is forecast with wheat to remain the upside leader while corn needs to push above its recent high in May futures at $7.80 to entice another round of chart-based buying. July soybeans should uncover solid support below $16.40 on tightening stocks.

• Chicago brokers estimate that funds have bought 3,200 contracts of wheat and 2,100 contracts of corn, while selling 3,200 contracts of soybeans. In soy products, funds have sold 1,900 contracts of soyoil and 4,200 contracts of soymeal. There was an early push of new investment pushed into Chicago, but the fall in stock/energy prices pulled values from their highs.

• The USDA/FAS announced that another 1.02 million mt of US corn was sold to China. The sale included 680,000 mt of old and 322,000 mt of new crop. With 12.1 million mt of US 2021/22 corn sold to China on a known basis, and another 1-1.50 million estimated to be held in the unknown category and including the 2 sales of more than 1.0 million mt each in the past week, China has secured an estimated 15.0 million mt of US corn for 2021/22 crop year. And rumours abound that China will announce another 1-2 million mt of US corn for an old crop year bringing purchase total to 15.5-16.5 million mt. Including the 5.9-6.2 million mt that was already shipped to China from Ukraine before the invasion, we estimate that China has purchased some 21.5-22.5 million mt of 2021/22 world corn. This leaves another 3-5 million mt of corn demand that is up in the air. Will China secure additional old crop or shift that demand to US new crop. China’s corn import pace so far in 2021/22 is on par with last year when they imported 29.5 million mt.

• US weekly export sales for the week ending April 7 were 55.8 million bu of corn, 28.1 million bu of soybeans, and 15.1 million bu of wheat. The shipments were all close to expectations based on vessel line ups. For their respective crop years to date, the US has shipped out 647.7 million bu of wheat (down 139 million or 18%), 1,260 million bu of corn (down 232 million or 15%), and 1,651 million bu of soybeans (down 369 million or 18%). The US weekly corn and soybean export pace will increasingly gain vs. last year due to the Black Sea supply loss. US soybean exports will be exceptionally robust during July/August.

• US farmers are unwilling to sell Chicago weakness with their new crop still in the seed bag. And producers fear that they have sold too much new crop due to historically high prices.  We estimate that US farmers have sold 40-50% of their new crop soybean and 50-60% of new corn crops.

• Chicago will be closed on Friday for Good Friday.

• The midday GFS weather forecast is just like the overnight run with heavy snows across N Dakota with totals of 12-28”. The snows will be the heaviest in several years and come at the wrong time to advance spring planting. Otherwise, the US Plains are dry while the Delta endures flooding rain. The Midwest has a cool to cold temperature bias which slows seeding and germination.

• It is a short 4-day week, La Niña is strengthening again which raises the Plains/W Midwest drought risks. A bullish bias is maintained with wheat being the upside leader. May or July corn should test resistance at $8.00-8.50 while July beans hold support at $16.30. As China needs to cover their late summer import needs, this break will produce such an opportunity.  Soyoil will lead the complex higher on tightening world vegoil stocks amid the pure lack of sun oil supply.

• HEADLINES: The USDA update lacked bearish surprise; Traders buy break on weather concern for NC Brazil/US Plains; World vegoil prices surge.

• The April USDA report was a “yawner” with WASDE once again conservative in their reducing the Brazilian soybean crop and raising 2021/22 US corn and soybean export estimates. It appears that they do not want to be part of the food inflation problem. Understandably, WASDE has no way of knowing when the Russian war will end, and they will only adjust Black Sea exports and grain stocks as time passes. This leaves the USDA not in a forecasting position, but one of following the data and being behind the market in terms of forecasting future US farmgate prices.

• WASDE left 2021/22 US corn end stocks at 1,440 million bu with just a 25 million bu bump in ethanol use to 5,375 million and a like 25 million bu cut in feed/residual to 5,625 million. We would argue for a 50 million bu hike in US corn feed/residual demand based on the lack of feed wheat and sorghum that will be available in the months ahead. WASDE raised the average US farmgate price to $5.80. Corn futures should hold strong.

• WASDE raised their estimate of the Brazilian corn crop by 2 million mt to 116.0 million while leaving the Argentine corn crop unchanged at 53.0 million mt. We would note that Ukraine 21/22 corn exports were lowered by 4.5 million to 23.0 million mt which raised their stocks to 6.55 million mt. We believe that WASDE will cut Ukraine exports further to maybe 18.5 million mt amid their difficulty in exporting during the war. World corn exports were lowered 2.9 million mt due to Ukraine. 2021/22 world corn demand will increase amid the decline world feed wheat supply availability.

• WASDE cut 2021/22 US soybean end stocks by 25 million to 260 million bu, just 3 million bu above last year, by raising the export estimate to 2,115 million bu. We argue that the USDA export estimate is 90-110 million bu too low which would drop end stocks closer to 150-160 million bu, which is pipeline stock level. WASDE also raised its seed use by 4 million bu to reflect the record 91 million acres to be planted this spring. The average farmgate price held at $13.25.

• WASDE dropped its 2021/22 Chinese import estimate to 91.0 million mt, which we believe will be too low by 3-4 million mt. World imports to China are running just 1 million mt below last year’s pace through March. The Brazilian soy crop was lowered to 125.0 million mt (down 2 million) with Argentina at 43.5 million mt. We look for additional cuts in S American crop production in May.

• The April WASDE is bearish on paper, but price determination is now cantered solely on US, European and Black Sea weather, as well as the increasing likelihood that conflict in Ukrainian will be ongoing throughout 2022.

• USDA lifted 2021/22 US wheat ending stocks 25 million bu to account for reduced exports (-15 million) and lower projected feed use (-10 million bu). We view the adjustment to feed/residual use as premature, but the trimming of exports was fully expected given the pace of sales and shipments to date. Wheat’s season average cash price was raised $0.10 to $7.60/bu.

• World and world less China ending wheat stocks were lowered 3.1 million mt amid larger projected Indian domestic use. Elsewhere in the global balance sheet, Russian exports were raised 1 million to 33 million mt, which makes little sense, while Ukrainian exports were lowered 1 million to 19 million mt. Total world wheat trade in 2021/22 is now pegged at 200 million mt, vs. 203 million in March and 202.6 million a year ago.

• The 2021/22 world wheat balance sheet has been solved, according to USDA, via a slowing of demand growth and record Indian exports. However, priority number one remains US HRW yield potential and whether Black Sea surpluses return to the world market by August. It will be impossible to replace the Black Sea’s share of world trade in late summer/autumn. Our outlook remains bullish. Note that Ukraine and Russia in Aug-Oct 2021 exported 21 million mt of wheat.

• Markets are no longer trading WASDE data as USDA will continue its measured approach to S American corn production estimates and the full impact Ukrainian conflict has on trade flows. Weather pattern shifts are needed immediately in Brazil and in the US S Plains. Breaks into late spring will limited strictly to periodic profit taking.

• HEADLINES: Chicago uncovers demand on the early break; US Plains weather forecast arid, USDA report due Friday.

• Chicago futures are mixed at midday with soybeans leading the rally, while the grains slide on position squaring ahead of the USDA April crop report due tomorrow. The USDA report should not produce market fireworks, but at elevated prices and high volatility, traders want to be conservative in their positioning. Morning Chicago trade volume is subdued and interestingly, open interest totals are well below last year.

• We look for a mixed to mostly higher close, with traders likely to add weather and war premium to Chicago valuations heading into the weekend. As we hinted yesterday, our fear is that the Russian war against Ukraine will be long and drawn out, which must facilitate a repricing of world grain and vegoil values over time. The world can band aid Black Sea export losses for a few weeks, but if the conflict is ongoing, that task becomes almost impossible as world supply shortages manifest themselves by late spring and early summer. Any lasting sustained Chicago price decline can only be started with record large EU, US, and Canadian crop yields. The market risks are to the upside with any US/European or Brazilian corn crop loss, exacerbating the rally effort. Bull market trends show no sign of relenting.

• Chicago brokers estimate that funds have sold 2,400 contracts of wheat, 3,100 contracts of corn, and 8,200 contracts of soybeans. In soy products, funds have bought 900 contracts of soymeal and 2,500 contracts of soyoil. The better volume today has been in the soy complex on the rally.

• US weekly export sales for the week ending March 31 were 5.7 million bu of wheat, 30.8 million bu of corn, and 29.4 million bu of soybeans. There was also 5.7 million bu of new crop corn and 11.0 million bu of new crop soybeans that were sold.

• For their respective crop years to date, the US wheat sales pace lags last year by 222 million bu or 24%, US soybean sales lag by 166 million bu or 7.4%, with corn sales off 467 million bu or 18%. The US soybean difference has narrowed quickly, and China continues to book late July/August offerings from the US Gulf. We would also remind that US Census corn exports are running 200 million bu ahead of FGIS weekly inspections.

• CONAB raised Brazilian yield in their forecast of a record large 88.5 million mt winter corn crop as of April 1. However, adverse weather has impacted 65% of the crop in recent days. And like CONAB’s forecast of the soy crop in December, coming weeks are critical for final Brazilian corn production. We hear that corn has gone backwards fast in recent days of sunny/hot/dry weather. Soil moisture levels are limited, and rain is needed today as the crop starts to pollinate. Crop concern is growing.

• The midday Central US GFS weather forecast is consistent with limited rainfall for Southern and US Central Plains into late April. The Midwest will endure rain every 4-5 days with a potent system due during the middle of next week producing widespread heavy snow across the E Dakotas, Wisconsin, and portions of E Iowa. The cold and wet forecast offers little chance to seed spring crops. And the Delta is targeted with 2-5.00” of rain next week which further adds to their flooding woes. The opportunity for widespread Midwest spring seeding is poor into April 20, thereby pushing corn seeding into a narrow 10–14-day window in late April/early May if warmer temperatures arrive.

• The flow of funds is on the buy side of the ledger today. A large US bank is discussing that commodity prices may have to rally another 40% based on investors placing additional raw material positions. The US inflation reading for March will be released on Tuesday could reach 9%. We hold a bullish Chicago view on tightening world supplies. Any loss of the 2022 Brazilian winter corn crop would cause a quick rally to $8.00-8.25 resistance. China stays active securing Brazilian and US soybeans.

• HEADLINES: Chicago mixed with wheat rising on dry Plains weather forecast; CONAB out Thursday; China for more US corn.

• Chicago values are lower at midday in a back-and-forth type of day. Following two days of sizeable gains, traders are banking profits ahead of CONAB/WASDE on Thursday and Friday. And the Goldman Index fund roll starts Thursday and runs for 5 business days. The bear spreading in May futures and profit taking is capping rallies while end users/importers are there to secure breaks. We doubt that any Chicago break will carry very far either in price or time.

• The bullish fundamental outlook of Chicago has not changed. The big topic being discussed today is the duration of the Russian war against Ukraine.  US General Milly suggested that the Russian war could last for years, while others including US National Security Advisor Jake Sullivan suggests through the end of 2022 or potentially into 2023. The point is that US military intelligence does not see Russia’s war against Ukraine as ending in coming months. Sure, there can be times when the cease fire talks appear positive, but Russia’s aggression and history in war argues for a protracted conflict. The problem is that Chicago has not priced in a protracted conflict or that Ukraine/Russian supplies will be limited in the coming months. One must wonder if at some point, a repricing of grain/soy values is required.

• The USDA announced that 132,000 mt of US soybeans was sold to China. We hear that additional Chinese buying is working for July-August and new crop positions. China is record short of soybeans and will remain a significant buyer on breaks. In fact, the US will single handedly fill the world soybean market from July onward which will continue to raise USDA soybean export estimates. We notes that COFEED, the supplier of China’s domestic crush and cash prices ceased operations nearly 1 year ago and are still not publishing as the Government tried to crack down on speculation. Existing domestic crush estimates within China do not correlate very well with imports. Through March, China’s soybean imports are down just 1 million mt, and tight stocks argues that the WASDE estimate is understating soybean imports from the world.

• Chicago brokers estimate that funds have sold 2,300 contracts of wheat, 4,400 contracts of corn, and 3,100 contracts of soybeans. In soy products, funds have sold 2,100 contracts of soyoil and 900 contracts of soymeal. The volume all day has been exceptionally slow, and it does not take much volume to push the market around. This is one of the slowest volume days that the market has endured since late February, when the Russian invasion occurred.

• There are also rumours that COFCO has switched more old/new crop corn on their books to Sinograin, which could produce another daily sales announcement of US corn to China before the weekend.  We estimate that China has secured 3.5 million mt of old crop corn including the 1.0 million mt that was confirmed on Tuesday.

• US weekly ethanol production was 295 million gallons.  The production was down 10 million gallons from the week prior, but up 3% from las year. This was the first week in 4 that US ethanol production did not exceed the 300 million gallons/week needed to reach the USDA annual US forecast.

• The midday Central US GFS weather forecast is consistent with limited rainfall for Southern and US Central Plains. The Midwest will endure rain every 4-5 days with a potent system due during the middle of next week producing widespread heavy snows across South Dakota, Minnesota, and Northern Wisconsin. The cold and wet forecast offers little chance to seed spring crops. The Delta is targeted by the midday run with 5-7.00” of rain.

• It is a low volume market pause following 2 days of solid gains. The fears are growing that the Russian war against Ukraine could carry on for months and potentially years. Chicago values are not pricing in such an extended period of military activity in Ukraine. The spring planting season has started across Ukraine and activity is subdued. Amid the widening loss of infrastructure and deepening sanctions on Russia, the Chicago outlook stays bullish.  China remains active in securing US soybeans and corn.

• HEADLINES: US corn exports a bullish surprise for February; Plains and Central Brazilian weather forecasts arid; Yield concern rising.

• Chicago values are higher with KC wheat the upside leader as traders discuss a US 2022 all wheat yield of 45-46.5 bushels/acre due to the disappointing US winter wheat crop ratings released yesterday. Moreover, the EU monthly weather forecasts were just released, and they show a deepening Central US drought from June through August from the Great Plains eastward to the Mississippi River. We note that the EU monthly forecast helped call the S American drought well in advance and should not be dismissed. Political and war risks collide in the marketplace heading into summer. Chicago will be unable to sustain a break (other than on a few days) due to profit taking or headlines that suggest that Russia/Ukraine are making progress in cease fire talks. Chicago values need to keep encouraging US farmers to seed every available acre. A higher Chicago close is forecast based on the demand rationing need of US wheat.

• Chicago brokers estimate that funds have bought 2,900 contracts of wheat, 6,200 contracts of corn, and 5,700 contracts of soybeans. In the products, funds have bought 200 soyoil and 4,400 contracts of soymeal. The Goldman roll starts Thursday and runs for 5 business days. We expect that Goldman will be putting additional funds to work in the commodity space via diversification.

• You can tell that new money is being pushed into Chicago when large volume occurs in the first 10-15 minutes of the day. This volume is tied to fund managers that are adding grain exposure to their portfolios. And ETF in corn, soybeans and wheat are balancing purchases and the needed purchases in futures to cover the risk. Inflows are expected to persist with the US inflation report due April 12. We fear that the March US inflation rate could reach upwards of 9%.

• The USDA did not release any fresh export sales this morning. China is still on holiday but will likely return with their buying shoes on in soybeans and potentially corn. A US domestic grain merchandiser named COFCO has likely already purchased the US cash corn, but the sale does not get announced until it is transferred to Sinograin, a Chinese Government grain importer.

• The Monthly US merchandise trade Report was released today. The report showed a February corn export rate of 261.9 million bu, wheat at 68.1 million bu and soybeans at 139.3 million bu. The February corn export rate was 18% above FGIS or 40 million bu based on ongoing record large US corn exports to Canada. September-February (half the crop year) US Census corn exports are 217 million bu above FGIS inspections, and 13 million bu ahead of last year’s export pace. In 2020/21, US corn exports were 2,753 million bu and a similar or higher rate appears likely in 2021/22. WASDE’s 2021/22 March US corn export estimates of 2,500 million bu is too low by 200-250 which will drop end stocks close to 1,200-1,250 million bu without a 50 million bu increase in the US ethanol grind. Old crop corn will be tight!

• Russian President Putin’s approval rating reached above 70% this week as the Russian population is embracing his “special operation” within the Ukraine. The surge of Putin’s popularity will push him and his military leadership to “fight on”. We would like nothing more than the Russian war to end, but Russia sees the war as their strategic battle against the west and to place land boundaries around Russia in case of an invasion. Unfortunately, the war could persist for longer than many of us in world agriculture imagined.

• The midday Central US GFS weather forecast is consistent with limited rainfall for Southern and US Central Plains over the next 10 days. Temperatures warm dramatically in the 6–10-day period with 80’s/low 90s across the S Plains. The lack of rain, strong winds and warming temperatures will add further stress to HRW wheat. And 12-18” of snow will fall across South Dakota/Minnesota next week, adding to what is becoming an extended winter.

• WASDE should lower US corn/soy end stocks on Friday with S American crops to fall again. US 2021/22 wheat end stocks could ease on enlarged feed use. Bullish Chicago price trends prevail with US and S American weather gaining in market prominence. Stay bullish. New rally highs could be formed next week.

• HEADLINES: USDA confirms that China secures 1.0 million mt of US corn; European rapeseed oil at record $1.02/pound, Dryness for the Plains/Central Brazil.

• Chicago values are sharply higher as premium is added as the Russian war against the Ukraine rages on. Corn, soybeans, and wheat futures are all posting sharp midday gains, even with China on holiday. The volume of Chicago trade has expanded with traders preparing for the start of the Goldman Roll on Thursday.  New money also appears to be entering the commodity space with a host of raw material markets rallying including the energies. It is “risk-on” in energies, metals, and grains as Russian/Ukraine cease fire talks appear to be stalled.

• Also, worrisome was the weekend damage and intentions of Russia to control Ukraine’s Black Sea ports. Odessa damage assessments vary from exporter to exporter, but all are worried about a future onslaught. The Russian war shows little sign of ending with US President Biden calling Putin a war criminal for the civilian atrocities north of Kiev.

• Chicago brokers estimate that funds have bought 4,300 contracts of wheat, 6,700 contracts of corn, and 5,100 contracts of soybeans. In the products, funds have bought 3,200 soyoil and 4,600 contracts of soymeal. Also, end user pricing was noted in meal early this morning. Other than profit taking, new selling is difficult to uncover with the rally not sparking much farm selling.

• The USDA announced that China was a buyer of 1,084,000 mt of US corn which   included 676,000 mt of old and 408,000 mt of new crop. US exporters suggest that another 2.5-3.0 million mt will be added in the coming days and weeks. In total, it appears that China has purchased 3.5-4.0 million mt of US corn. We would guess that 60% of the sale is old crop for mid to late summer shipment. The China corn purchase boosts the case for USDA to raise their 2021/22 corn export estimate by 50-100 million bu in Friday’s report.

• CONAB’s April Crop Report will be out on Thursday with WASDE out with their report on Friday. The April 8 WASDE report does NOT include new crop balance sheets, but we look for WASDE to raise old crop US soybean/corn exports based on pace analysis and another 30 days of the Russian war against Ukraine. WASDE must take down Ukraine corn exports by 3-5 million mt due to the ongoing war. The cut in Ukraine corn exports will boost the US’s. It is rare that you have consecutive weeks of important USDA data jostling the marketplace.

• A frost/freeze occurred across European ag areas on the weekend. It will take a week to assess any crop damage, but like last year, there is worry that the top end could have been taken off wheat/winter canola yields.

• Although winter Brazilian corn has been able to catch enough moisture heading into early pollination, dryness across the Mato Grosso, Goias and MGDS looks to deepen in the coming dry 2-3 weeks. The timing of the dryness could not be worse with corn pollination starting. April/May rains are desperately needed.

• European rape oil values reached a record $1.02/pound today. This high cash price along with sun oil trading above $2,200/mt ($1.00/lb) makes US soyoil appear cheap at $0.70/lb. Amid rising S American soyoil premiums, the break in soyoil futures late last week was corrective in a longer-term bull market.

• The midday Central US GFS weather forecast runs are consistent with limited rainfall for the Canadian Prairies and the US Plains over the next 2 weeks. The forecast warms dramatically in the 7–10-day period with 80’s/low 90s forecast for the Southern and Central Plains. The lack of rain, strong winds and warming temperatures look to add further stress to HRW wheat. The E Midwest holds in a wet/coolish upper air flow.

• December corn has reached above $7.00/bu amid a need for additional acres and the largest China corn order in nearly a year. KC wheat is holding firm with key crop condition reports due out from NASS after the Chicago close. China returns from its holiday on Wednesday (Tuesday evening in the US) with fresh demand for US soybeans expected. Dryness in the Plains and Central Brazil must be closely monitored. We continue to remain bullish.

• HEADLINES: Dec corn nears $7.00; Old/new crop corn spreads collapse; 5 wheat suppliers around the world need to be monitored.

• Chicago values are sharply mixed at midday with active bear spreading noted in old/new crop corn. It is not often, but corn spreads have been more violent than flat price, which is saying a lot when the corn daily price range exceeds $0.25/day. The May-December corn spread peaked on March 3 at $1.3575 and has fallen sharply to $0.50. We would argue that the spread may have to come near even money. Remember that the Goldman roll starts late next week which is likely to add additional pressure to corn bull spreads.

• Soybeans have pushed to the downside on long liquidation while wheat holds on to the speculative buying. There are 4 weather hotspots for 2022 world wheat supplies that must be monitored during April; 1) The US Central Plains, 2) The Canadian Prairies, 3) Northern Chinese Plains, and 4) Russia. It only takes weather adversity for one region to push world wheat futures to new highs.

• We look for a mixed Chicago close with December corn testing $7.00 as the market tries to economically encourage farmers to seed additional acres. Soybeans and the soymeal market are weaker on spreading and liquidation, but with old crop US 2021/22 soybean end stocks under 200 million bu, the downside price risk for July soybeans appears to be no more than $15.50. Dec KC wheat has support below $10.00 with US wheat export demand brightening at harvest.

Weekend summary 1 April 2022