Corn

  • The May corn contract finished the week at $4.3550 per bushel, more than a penny higher versus the Friday before.
  • USDA’s weekly Export Sales report showed net corn sales of 325,479 metric tons for 2023-24, a marketing year low. Sales dropped 66% from the previous week and -72% from the prior four-week average. Even so, Japan and Mexico increased their purchases.
  • Corn and soybean exports have 18 weeks left of the 2023-24 marketing year to reach USDA’s projections. Corn sales are on pace with the five-year average. Corn’s cumulative exports are 51% of the way to USDA’s marketing year forecast of 53.342 million metric tons. To reach that projection, weekly sales need to average 1.144 million metric tons.
  • USDA released its April WASDE report Thursday. In it, USDA pegged April corn ending stocks at 2.122 billion bushels, slightly below March and within the trade’s expectations. World production estimates were eyed the most due to falling crop estimates in Brazil. Argentina’s corn stocks, at 55 million metric tons, dropped by 1.0 million metric tons. USDA left Brazil’s corn output unchanged from March at 124 million metric tons. World ending stocks were pegged at 319.63 million metric tons, unchanged from USDA’s March estimate.
  • USDA’s Crop Progress report shows 3% of the US corn crop has been planted.
  • Brazil will maintain tariffs on US ethanol imports despite complaints from the Biden administration, said Agriculture Minister Carlos Fávaro.
  • Wednesday’s EIA Weekly Ethanol report showed production down to an average of 1.056 million barrels per day, compared to 1.073 million a week earlier. Ethanol stockpiles in the week through April 5 fell modestly to 26.208 million barrels from 26.416 million seven days earlier.
  • A big warm-up next week in the Eastern Corn Belt and the Deep South will bring much-needed drying. Meanwhile, April 16-17 should bring significant rains for the Upper Plains and Western Corn Belt. States set to receive the rains include Nebraska, South Dakota, North Dakota, Minnesota, Iowa, Wisconsin and northern Illinois. Also, moderate rainfall amounts are expected for the Eastern Corn Belt.

CORN COMMENTARY BY BRANDON WEIGEL

  • Corn futures continued their stagnant, sideways trade this week as everyone anxiously awaits the bulk of planting across the Corn Belt over the next few weeks. Planting has begun in parts of the Southern Corn Belt. Meanwhile, Brazil’s safrinha corn crop was 99% planted as of last week.
  • Welcomed rainfall moved across a large swath of the Midwest over the last two weeks, bringing sufficient precipitation to help partially replenish deficient sub-soil moistures. While recent rain and snowfall has not totally replenished the sub-soil, it went a long way in alleviating
    near-term concerns around dryness.
  • Corn export commitments grossly disappointed this week, coming in at just 325,479 metric tons versus the 750,000 to 1.3 million anticipated. Corn exports prior to this week had been strong relative to last year and have largely fallen within the range of expectations.
  • China has begun to cancel some corn shipments to comply with new government measures aimed at supporting domestic farmers. Reports on Thursday showed they allegedly cancelled four or five cargo ships of Ukrainian corn. As China moves to be more self-sufficient in grain production, now allowing their producers to utilize GMO technology, it is worth keeping a close eye out to see if these trends continue.
  • Ethanol production continues to run hot. Average daily production for the week ending April 5 averaged 1.056 million barrels, a new high production for this week of the year. Ethanol stocks year-over-year are up 4.3%.
  • Argentina’s 2024 corn harvest is now expected at 50.5 million tons, down from the March estimate of 57 million tons, according to a monthly report from the Rosario Board of Trade. USDA disagrees, putting the crop at 55.0 million metric tons. Some reports say Argentina’s corn crop is experiencing some damage from an unusual boom in leafhoppers that spread the corn stunt disease spiroplasma.

Soybeans

  • May soybean futures settled at $11.7400 per bushel, down 11 cents on the week.
  • USDA’s weekly Export Sales report showed net soybean sales of 305,257 metric tons for 2023-24 were up 57% from the previous week, but down 3% from the prior four-week average. Sales increases to Mexico and Egypt were highlighted in the report.
  • Soybean exports as of March 28 are 79% of the way to a projected 46.811 million metric tons. A weekly export average of 436,692 metric tons will help soybeans reach USDA’s forecast. Soybean sales trail the five-year average pace.
  • USDA raised US April soybean ending stocks to 340 million bushels from 315 million in March. Thursday’s estimate came in at the top of the trade’s expectations. Argentina’s soybeans, at 50 million metric tons, were unchanged from USDA’s March estimate. Brazil’s soybean output predictions were also steady at 155 million metric tons. World-ending stocks landed at 114.27 million metric tons, in line with USDA’s March estimate.
  • China soybean imports will increase in April to 9.19 million metric tons. Of that total, 6.36 million metric tons will be from Brazil and 2.83 million metric tons from the US, LSEG Commodities Research & Forecast estimates.

SOY COMMENTARY BY MATT TRANEL

  • Soybeans struggled this week as Monday through Thursday markets posted lower settlements. Bids for beans out of the Gulf remained flat or slid a bit, putting pressure on the futures market. Managed money clocked in a net-short position last week of 127,018, and this week’s softness will undoubtedly show additional bearish bets out of the funds.
  • USDA left both Argentinian and Brazilian soybean production estimates unchanged from March numbers. The range of guesses was 148-155 million metric tons, with an average of 151.68 million metric tons. USDA left production at 155 million. CONAB, Brazil’s agriculture agency, estimates the crop at 146.5 million metric tons.

Wheat

  • Nearby wheat futures finished Friday at $5.5600 per bushel, more than 11 cents lower on the week.
  • USDA upped US April wheat ending stocks to 698 million bushels, an increase from 673 million in March and within the trade’s expectations. World ending stocks came in at 258.27 million tons, nearly equal to USDA’s March estimate.
  • USDA reports that 3% of the US’s spring wheat crop has been planted, equal to the five-year average. Monday’s report shows 56% of the crop rated in good-to-excellent condition, unchanged from the previous week and up from 27% a year ago. USDA rated 12% of the crop very poor to poor, down from 37% a year ago. Winter wheat: 6% was headed as of Sunday, April 7, down 1 point from last year but 1 point ahead of the five-year average of 5%.
  • US wheat export inspections dropped to 498,000 tons this week, compared to 569,000 tons a week ago and 390,000 a year ago, according to USDA.

WHEAT COMMENTARY BY KRISTIN STIEN

  • Wheat pushed lower, due in part to anticipation and results of USDA’s WASDE report on Thursday. Combine an increase in ending stocks expectations with weak old-crop export announcements and strong winter wheat condition ratings of 56% good-to-excellent (27% better than last year), and that equals continued price pressure.
  • Traders may work to find support at the technically pivotal $5.50-per-bushel level. When considering strong new-crop export announcements, decreased world ending stocks and continued conflict in Russia and Ukraine, market bears may be encouraged to take a breather at this number.
  • Going forward, we will monitor the spring wheat planting pace, as well as managed money movement. Funds continue to wrestle with what the Fed will do with stubborn inflation and geopolitical uncertainty. Gold has started to see an uptick in price as a hedge against these unknowns. The question remains around the likelihood of other commodities, like the grains sector, being used as a hedge, or if ending stocks will provide a massive weight to prices.

Futures and options on futures trading involves significant risk and is not suitable for every investor. Information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended for informational purposes. Information is obtained from sources believed reliable but is in no way guaranteed. Opinions, market data and recommendations are subject to change at any time. Past results are not indicative of future results. Jon Spainhour and Cole Adams maintain financial interest in the commodity contracts mentioned within this research report at the time it is published. Erica Maedke, Tracy Mobley, Mark Majoros, Meg Johnston and Verl Prather do not maintain financial interest in the commodity contracts mentioned within this the research report at the time of publication. This report is in the nature of a solicitation.