CORN HIGHLIGHTS:

• Corn prices found some buying support on Wednesday as strength in wheat, the crude oil market and a weaker dollar helped support prices. Despite the higher trade, May futures traded within yesterday’s trading range as prices consolidated.
• The USDA will release weekly export sales on Thursday morning. Expectations for new sales to range from 800,000 – 1.4 mmt. Last week corn sales totaled 1.206 mmt, which was toward the top end of expectations. Current corn export sales are running ahead of the pace needed to reach USDA targets.
• Concerns about HPAI (Avian Influenza) have weighed on grain markets over the past couple sessions. The detection of HPAI in cattle herds and in US poultry flocks have the market concerned about limited demand potential and added selling pressure.
• Brazil weather is still favorable overall 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.
• Weekly ethanol production averaged 1.073 million barrels/day last week. This hit a new daily high for production for the year. Total production was up 7.0% from last year’s levels. Corn used in ethanol production was estimated at 106.5 mb for the week. Total corn used for the ethanol grind for the marketing year has reached 3.104 bb, which is currently ahead of the pace needed to reach USDA targets.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day higher, breaking the trend of five consecutive days of losses prior to today. Futures were likely recovering from oversold conditions but also got help from higher soybean meal and oil prices. May soybean futures are back in between the 40 and 50-day moving averages.
• Tomorrow, the USDA will release its export sales report. Soybean sales are expected to be on the soft side again with trade guesses between 200k and 600k metric tons. There have been no soybean flash sales reported in two weeks, and part of the weakness in soybeans lately has been the lack of export demand. This demand is not expected to improve with the ongoing South American harvest.
• Crude oil rallied sharply today above $86 per barrel with support from the lower US Dollar. Higher crude oil prices along with stronger vegetable oil prices have been a big support to soybean oil and soybeans. Demand for soybean oil as feedstock is increasing as more biofuel plants pop up across the country.
• In Brazil, CONAB has estimated that their soybean harvest is more than 71% complete while other analysts peg the completion at 76% done or higher. Discrepancy over total production remains with the USDA holding relatively firm in its guess of 156 mmt while CONAB is much lower near 142 mmt.

WHEAT HIGHLIGHTS:

• Wheat stopped the bleeding today with a higher close for all three classes. The rally was likely fund short covering; managed funds are estimated to still be short about 90,000 Chicago wheat contracts. In addition, the sharp drop in the US Dollar today may have offered some support to wheat and the grain complex.
• Russia is reportedly expanding their investigation on the quality of grains for export. Recently, as much as 400,000 mt of grain belonging to shipper RIF, was stuck in port. Now, sources say that Russia has not issued the necessary phytosanitary certificates for two Aston vessels.
• There are some weather issues in Western Europe, where they have received too much Rain. France in particular is expected to receive an additional 1-2 inches. Interestingly, Paris milling wheat futures had a mixed close, with a loss of 0.50 Euros in the front month May contract, but a gain of 0.50 in December.
• According to Reuters, the Indian government is asking private traders to not purchase new-season wheat in an effort to rebuild reserves. Over the past couple of years, record amounts of wheat were sold out of reserves to reduce food inflation and an export ban from 2022 also remains in place. The Food Corporation of India, which is backed by the government, plans to purchase 30 mmt of wheat in 2024, compared with 26.2 mmt last year.

DAIRY HIGHLIGHTS:

• The cheese rally to start the week stalled out on Wednesday as sellers moved another 9 loads of inventory and pushed blocks down 0.50c and barrels down 0.25c. The block/barrel average closed at $1.4450/lb.
• The whey trade ran into some selling pressure as well, falling a penny to $0.38/lb.
• By close, April ’24 Class III milk lost 5c to $15.64. This is the fifth down day in a row as the market continues to hit new contract lows.
• Class IV had another strong session, aided by a 2c higher bid in butter to $2.94/lb. There were 11 loads traded.
• All Class IV milk futures contracts are back over the $20.00 handle and each contract, August through November, closed over $21.00.

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Author

John Heinberg