CORN HIGHLIGHTS: 

• Risk off trade across many markets weighed on corn prices. The market saw money flow out of corn as fear of the looming debt ceiling and fed interest rate announcement on Wednesday led to broad based selling.
• The USDA Crop Progress report showed corn planting at 26% completed, even with the 5-year average, and slightly below market expectations. Cold temperatures continue to limit planting pace in the northern and western Corn Belt states, but southern planting progress has been strong.
• Planting should start to pick up more in some areas, as forecasts are calling for warmer and drier weather into the second week of May for the northern and eastern Corn Belt.
• Demand concerns remain an overall concerning theme for the corn market as export activity and corn bushels used for weekly ethanol production are running behind USDA forecasts. This brings fear that the USDA will make further demand adjustments on the May 12 WASDE report, potentially increasing corn carry out projections.

SOYBEAN HIGHLIGHTS:

• Soybeans were higher for most of the day but ultimately turned sharply lower, as crude oil declined suddenly to a loss of nearly 4 dollars a barrel.
• Soybean plantings in the US are ahead of pace at 19%, while the 5-year average is 11%. Illinois and Iowa are leading the way with the benefit of better planting conditions.
• Tomorrow’s Federal Reserve announcement for interest rate changes likely put pressure on crude oil today and therefore soybeans. The Fed is expected to increase rates by 25 basis points, but there is a small chance of no change due to the most recent banking failure.
• While export demand remains sluggish, domestic demand is still firm thanks to the still profitable crushing margins. There have been no deliveries so far against May soybeans or soybean meal, which is a testament to the tight supplies.

WHEAT HIGHLIGHTS:

• After strength earlier in the session, wheat closed lower in all three US futures classes. Paris milling wheat futures were also sharply lower at the close.
• The USDA’s Crop Progress report showed spring wheat was 12% planted vs 22% average. Additionally, winter wheat condition was rated 28% good to excellent (up 2% from last week).
• As of this writing, crude oil is down roughly $4 per barrel, and the Dow is down about 450 points. This outside market pressure may have spilled over into the grains today.
• The Fed is expected to raise interest rates by one-quarter percent at the FOMC meeting this week. This could, in part, be offering weakness to financial and commodity markets.
• Further rains are needed in the US Southern Plains. In Kansas, the winter wheat poor to very poor crop rating is at 64% (2% worse than last week).
• Egypt’s GASC is tendering for wheat. With the recent drop in price, they could look to source it from the US. However, the freight costs may be the deciding factor.

DAIRY HIGHLIGHTS: 

• For the second GDT event in a row, the GDT price index closed green. This caused some strong buying pressure to take place in the US spot trade following the auction.
• Spot butter added 7c to $2.4225/lb on 13 loads traded. This is butter’s highest close since February.
• Spot powder rallied 3c to $1.1875/lb on 1 load traded.
• Each Class IV contract from June through December 2023 added double digits, responding to the steady up day for the spot products.
• Spot cheese was once again the weak spot of the market, dropping another 1.375c to $1.61/lb. Class III futures were mixed as a result.

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Author

Bryan Doherty