CORN HIGHLIGHTS:

• Today was a consolidation day in the corn market as overall news remained quiet for the session. Corn futures saw two-sided trade with a 7-cent trading range as the May futures finished unchanged on the session.
• Corn futures have traded higher and near the top of the daily trading range for the past three sessions, but today buying strength faltered. This may be an indicator that upward momentum has slowed, or farmer selling limited the market upside.
• The bearish fundamental picture of front-end corn supplies is still a major limiting factor in the corn market rally. With today’s close, corn futures are still trading at a 4-week high, and 33 cents off the most recent low on the May futures.
• The Brazilian Agriculture Agency, CONAB, released their March corn crop projections this morning.  CONAB lowered the expected Brazilian corn production estimate to 112.75 mmt, down nearly 1 mmt from last month and just over 19 mmt under last year on reduced planted area and dry weather in the early growing season. Total corn exports from Brazil were left unchanged from last month’s report at 32 mmt.
• Brazil’s weather will stay a focus in the corn market. Forecasts for a ridge of heat building over central Brazil later in the week help support Brazilian and US corn prices. If weather conditions become less favorable, additional weather premium may be added into the corn market.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher with support from a rally in soybean oil and the release of CONAB numbers showing lower expected soybean production in Brazil. May soybeans have now rallied over 67 cents from the low at the end of February. Soybean meal closed higher as well.
• Earlier today, CONAB released its estimate for the 2024 Brazilian soybean crop at 146.8 mmt. This was below the average analyst trade guess of 149 mmt and well off the estimate of 155 mmt that was just released by the USDA. The discrepancy between CONAB and the USDA has seemed to widen as harvest progresses.
• As the Brazilian harvest presses on, soybean premiums have trended higher since January due to a lack of farmer selling at those low prices. Higher Brazilian premiums have been bullish for US prices, but they could also spark farmer selling which could bring prices back down.
• Yesterday’s soybean inspections for the US of 26 mb brought inspections to a 23-week low with shipments down 19% from last year. Export demand will likely worsen as Brazil completes its harvest and Argentina continues its growing season.

WHEAT HIGHLIGHTS:

• Wheat was mixed to mostly lower today, though it did close within a penny or two of unchanged. By comparison, both May and September Matif wheat futures closed unchanged. After yesterday’s bullish key reversal in May Chicago wheat futures, it was somewhat disappointing that there wasn’t any strong follow through today. On a positive note though, there were no further announced cancelations of US wheat to China this morning.
• Wheat prices in Brazil continue to weaken, despite indications that their 23/24 wheat crop supply will be below demand. It is said that in Brazil, end users are looking for high quality wheat, but supply remains low. Internationally, prices have recently moved lower as well. Russia’s cheap exports are one of the main contributing factors. Their April FOB values have fallen to $198/mt, according to Sov Econ – this keeps the US uncompetitive on exports.
• CPI (Consumer Price Index) data this morning showed that inflation increased, with February higher than last year at 3.2% – the trade was looking for a 3.1% increase. In addition, the CPI was up 0.4% in the month of February alone, which was 0.1% higher than expectations. This indicates that the Federal Reserve may be slow to lower interest rates, affecting the US Dollar, and potentially wheat prices.
• Due to lower planted acreage, higher costs, and labor shortages, Ukraine’s 2024 grain and oilseed harvest could be down 8% versus last year, to 76 mmt. According to Ukrainian officials, wheat specifically may be down 14.5% to 20 mmt of production.
• CONAB released their estimates of Brazilian wheat production this morning, in which they projected a decline of 0.6 mmt to 9.6 mmt. For reference, the USDA is forecasting Brazil’s wheat production at 8.1 mmt. On a bullish note, India’s wheat stocks are said to have fallen to 9.7 mmt versus 11.7 mmt last year, which is the lowest March number in seven years.

DAIRY HIGHLIGHTS:

• Spot cheese was the only product to see weaker prices today. Blocks were unchanged at $1.4350/lb while barrels lost 4 cents at $1.42/lb. Barrels have now lost 25 cents in the last 9 trading days.
• The cheese trade led Class III prices lower with April futures taking the brunt of it losing 15 cents. Class III milk prices continue to be hampered by weaker spot trade and lack of overall demand with high cheese inventories. The 2024 Class III average lost 4 cents to close at $17.14/cwt.
• Spot butter improved 3 cents on the day to $2.8325/lb while powder gained a quarter at $1.17/lb.
• Class IV futures were uneventful on Tuesday after seeing no volume. Products for Class IV milk continue to keep Class IV prices steady near the top end of the range. The 2024 Class IV average was unchanged at $20.28/cwt.

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Author

Brandon Doherty