Corn

  • May corn futures settled at $4.4000 per bushel, up 6.5 cents on the week.
  • USDA’s weekly Export Sales report pegged net corn sales at 1.299 million metric tons for 2023-24, up 56% on the week and +74% from the prior four-week average. Mexico and South Korea stepped up their buying.
  • Currently, corn sales are running above the five-year average and are 60% of the way to USDA’s marketing year forecast of 53.342 million metric tons. To reach that projection in the remaining 17 weeks, weekly sales need to average 1.144 million metric tons.
  • Corn plantings advanced to 12% complete, in line with expectations and last year’s pace, while ahead of the five-year average of 10%. Emergence at 3% is ahead of 2023 and the five-year average of 2%, according to USDA’s Crop Progress report.
  • US weekly ethanol production dropped to 954 million barrels per day, according to EIA’s weekly data. That was down from 983 million a week earlier. Meanwhile, ethanol stockpiles dwindled 1.3% to 25.733 million barrels.
  • Farmers have been reluctant to sell corn or soybeans into marketing channels as they focus on spring field work and planting, according to ADMIS.
  • US 2023-24 corn consumption for feed and residual use will total 5.76 billion bushels, unchanged from a previous estimate, according to the Livestock, Dairy, and Poultry Outlook for April 2024. Pork and broiler production is offsetting the decline in annual beef production, the report shows.
  • Funds are now the shortest they’ve been across the agricultural complex in 4.5 years (-617,000 contracts, -$14.4 billion), betting that soft demand, ample global supplies and the strong dollar will keep prices down as we get deeper into risky planting weeks.

CORN COMMENTARY BY LORI NELSEN

  • As farmers are busy with spring planting, they do not seem very interested in selling corn. A little corn moved with this week’s rally, but there’s a lot sitting in storage. Basis levels have been firm and positive in several locations across the Midwest.
  • Planters in a large portion of the Midwest are rolling strong to get ahead of this weekend’s predicted showers and thunderstorms, which will temporarily halt planting for many.
  • Areas of Argentina are becoming infected with grasshoppers carrying a virus called spiroplasma, which burns the plant and aborts growth. The country’s corn output was expected to produce 50 million tons, but actual numbers maybe be lower as the crop matures. Notably, in Argentina, there is nothing registered for control of this disease.

Soybeans

  • The May soybean contract finished the week at $11.5950 per bushel, nine cents higher versus the previous Friday.
  • USDA’s weekly Export Sales report shows net soybean sales of 210,899 metric tons for 2023-24, down 57% from the previous week and -29% from the prior four-week average. The report highlighted increased sales to Mexico and China.
  • As of April 18, soybean exports were 82% 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.
  • Soybean plantings at 8% matched the year-ago pace and double the five-year average of 4%, USDA’s Crop Progress report showed.
  • The volume of Brazilian exports of soybeans and corn is expected to exceed the capacity of the country’s ports by 2027, Rabobank said in the report.
  • China continues to focus on buying Brazilian soybeans, limiting demand for US produce. China’s March soybean import volume from the US was half that of a year earlier, and corn exports also plummeted, per ADMIS.
  • Brazil’s soy harvest was about 89% complete, consultancy Patria Agronegocios said.

SOY COMMENTARY BY JIM MATTHEWS

  • May soybean futures spent the week on a nice climb before Thursday’s slight pullback. After what was nearly a month-long downtrend, futures bottomed out at $11.3175 per bushel last Friday, April 19, then initiated a near 46-cent run higher through Wednesday. The market was still down 49 cents from the March 21 high of $12.2675. Still, the rebound was welcomed among soybean producers holding old crop.
  • Planting in the Midwest has officially begun, and cooler and wetter weather has mostly been seen as positive throughout key production areas. Certain areas of the eastern belt, especially towards Indiana, have been slightly bogged down, perhaps adding slight support to what can be a more volatile planting timeframe.
  • Argentine soybean farmers have also been a bit swamped, with excessive moisture delaying harvest progress through key production areas. May 1 often sees the Argentine farmer at least 50% harvested, and most reports suggest we are closer to 25% at this stage, which has also provided support to old-crop soybean futures.
  • From a technical perspective, May futures ran up against the 20- and 50-day moving averages, which crossed paths last Friday, and provided key resistance near $11.70 per bushel. November futures have proven to be slightly more resilient, pushing through the 20- and 50-day moving averages and managing to settle slightly above on Thursday, closing at $11.7550. New-crop futures are impacted more by Midwestern planting wetness and the potential to reduce acreage through the spring. Seasonal support may help drive pricing closer to $11.90 before facing stronger resistance near $11.95.

Wheat

  • Nearby wheat futures finished Friday at $6.0325 per pound, 53 cents higher on the week.
  • USDA’s weekly Export Sales report showed net old-crop wheat sales of 82,035 metric tons, up 100% from the previous week and down 4% from the prior four-week average.
  • Fifty percent of the crop was in good or excellent condition as of Sunday, down from 55% the previous week, according to USDA. Seventeen percent was headed, up from 11% a week earlier and the five-year average of 13%.
  • Spring wheat plantings advanced to 15% complete, well ahead of the year-ago pace of 4% and the five-year average of 10%.
  • About 53% of Kansas was suffering from drought conditions as of April 16, up from 29% a week earlier, according to the US Drought Monitor. Wheat stress will persist in about 35% of the southern Plains, while parts of Colorado and Kansas may see some relief.

WHEAT COMMENTARY BY JENNI BIRKER

  • Weather concerns put some fuel in the rocket for wheat this week. Chicago wheat logged its seventh consecutive day of gains Friday, virtually erasing its losses from earlier this year. Dry conditions in western Kansas persist, and the same can be said for the Russian and Ukrainian growing regions, which don’t have rain in their forecast for the next 10 days.
  • Thursday’s USDA export report showed some “higher end of expected range” numbers for both old and new crop, with China, Guatemala and Indonesia leading the way as buyers.
  • Gains in the market, despite consumers buying fewer grain-heavy foods, were welcomed by producers. Earlier this month, Bloomberg reported USDA expects the amount of wheat used in foods to hit the lowest level in five years, but that clearly hasn’t affected the price we’re seeing today.
  • There’s definitely a bullish sentiment around wheat and not much out there to feed the bears right now, unless they want to head to the grocery store and grab some bread. Grocery aisle bread sales have fallen 2%. Factors contributing to this decline are credited to the “Ozempic movement” in weight loss. However, one could argue from a trip across social media, that perhaps the “sourdough movement” can take some of that blame, as well. People are baking more at home and buying less at the store. If this is the case, farmers can rest easy – wheat flour is a key ingredient to a good loaf of sourdough!

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. Brian Fletcher, Jon Spainhour, Lori Nelsen, Jim Matthews and Jenni Birker maintain financial interest in the commodity contracts mentioned within this research report at the time it is published. Katie Burgess and Erica Maedke 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.