CORN HIGHLIGHTS:

• It was a difficult day in the grain markets as strong selling pressure in the wheat market from favorable crop ratings spilled over into the corn market. Outside market weakness in the equity markets also helped add to the volatility as corn prices pushed the May futures to their lowest prices since March 5.
• Charts saw technical selling as corn prices pushed lower for the second consecutive session, trading below the most recent low of 426 in the May futures to 424 ½. The weak price action, poor money flow, and lack of bullish news will likely keep sellers active in upcoming sessions.
• Good precipitation forecast for the corn belt is likely to improve dry areas of the corn belt still reflected on the Drought Monitor maps. U.S. weather is looking more favorable for a potential good start to the 2024 U.S. corn crop.
• Brazil weather is still trending overall favorable for development of the second (safrinha) corn crop. There are no short-term issues now, but South American weather will remain a key market driver in the weeks ahead.
• Ethanol grind for the first half of the marketing year has been strong. During this period (Sept.-Feb.) corn used for ethanol totaled 2.712 billion bushels or up 6.4% over last year. This domestic demand is trending ahead of the USDA expect pace for the marketing year.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day significantly lower which marks the fifth consecutively lower trading day in the May contract. Pressure continues to come from last week’s USDA report, which showed higher intended planted acres than last year and pressure from lower soybean meal. Soybean oil closed higher and initially supported soybeans earlier in the day before fading.
• The driver behind the rally in soybean oil prices has come from palm oil and other veg oils. Sunflower oil has been cheaper which has incentivized India to import 51% more sunflower oil in March and 3.3% fewer palm oil imports.
• Yesterday afternoon, the Fats and Oils report was released and saw a new record for February soybean crush at 196.4 mb. This was slightly lower than the average trade guess but was up 9.6% from last year. While bean oil stocks were down 9% from last year and below expectations.
• Agrural estimated the Brazilian soybean harvest at 74% complete as of March 28, and Argentina is just now beginning to harvest its soybeans. With the influx of new South American soybean inventories, US exports have been struggling, and yesterday’s export inspections reflected that with just 15.2 mb inspected putting the total for the year at 1,359 mb, 19% lower than the previous year.

WHEAT HIGHLIGHTS:

• Yesterday’s downward momentum carried through to another negative close for US wheat futures. Pressure stemmed from a lower close for Matif wheat, and lower markets in neighboring corn and soybean futures. The grain complex may also be experiencing some spillover from lower equity markets; at the time of writing, the Dow is down over 450 points.
• According to the USDA, the winter wheat crop is rated 56% good to excellent and just 11% poor to very poor. This is a relatively good rating when compared with recent years and may also account for some of today’s weakness. Last year, just 28% of the crop was rated Good to Excellent (GTE). When looking at the breakdown, HRW wheat was rated 54% GTE, while SRW was 68% GTE. The USDA also reported that 1% of the spring wheat crop is planted.
• India is expected to import wheat for the 24/25 season, according to the USDA Foreign Agricultural Service. The season begins in April, and imports may total 2 mmt due to good domestic demand coupled with a drop in government reserves. If true, this would be the first time India has been a net importer since the 17/18 season.
• Saudi Arabia reportedly purchased 795,000 mt of wheat in their tender for June/July delivery, which was more than the expected 595,000 mt. This is the first wheat tender by their General Food Security Authority this year – the last tender was in December of 2023 and resulted in a purchase of 1.353 mmt. In other tenders, Japan is looking for 113,000 mt of wheat from the US, Canada, and Australia.

DAIRY HIGHLIGHTS:

• For the fourth day in a row, nearby Class III milk futures closed red as the market makes new lows once again.
• The Class IV trade had a great session on light volume. April gained 16c to close back over $20.00. May was up 30c to $20.19 while June added 38c to $20.50.
• Spot butter was bid 7c higher to $2.92/lb on 10 loads traded. This is a new high of the year.
• The Global Dairy Trade auction event this morning saw the GDT Price Index rise 2.80%.
• GDT cheddar now sits at $1.97/lb, whereas the US spot cheese price is still struggling to maintain $1.45/lb.

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Author

Brandon Doherty