CORN HIGHLIGHTS:

• Corn futures saw a short covering rally to end the week as concerns about escalating tensions in the Middle East between Israel and Iran spooked the markets on the overnight session. Friday’s price action was very similar to last Friday’s trade. Even with today’s strength, July corn traded 4 ¼ cents lower on the week and posted its lowest weekly in 7 weeks.
• The USDA announced a flash export sale of corn to Mexico this morning. Mexico purchased 216,500 mt (8.5 mb) of corn with 23,000 mt for the current marketing year and 193,500 mt for the 24/25 marketing year.
• The Environmental Protection Agency (EPA) issued an emergency fuel waiver to allow E15 gasoline to be sold nationally during the summer driving season. The program goes into effect on May 1, with sales running from June 1 – September 1. The waiver was passed to limit price shock concerns if tensions increased in the Middle East.
• Current precipitation and cool weather across the Corn Belt this week have likely limited planting progress in key corn producing states. Corn planting reached 6% complete last week, and concerns will increase if the pace is slow going into May. Typically, the US corn crop is approximately 27-30% planted by the end of April.
• The corn market may see selling pressure moving into the end of the month. Producers who hold May basis contracts will need to price or roll those contracts by first notice day, April 30, for May futures. This could bring a natural selling environment into the weak market tone for the corn market.

SOYBEAN HIGHLIGHTS:

• Soybeans closed significantly higher to finish the week after overnight it was reported that Israel sent attack drones to Iran in an escalation of Middle Eastern tensions. This caused crude oil to jump over three dollars at one point before it faded this morning. Soybeans may also have gotten a boost from higher corn as a result of the new EPA decision regarding E15.
• July soybeans have trended lower over the past month and are now just 25 cents off their low that was made in February. For the week, July soybeans lost 21 cents and November lost 15 ¼ cents. July soybean meal lost $0.90 for the week at $343.20, and July soybean oil lost 1.51 cents ending at 44.94 cents.
• In South America, there have been reports that Argentina is receiving too much rain which could be detrimental to their soybean crop. Yesterday, the Buenos Aires Grain Exchange said that 77% of the crop was rated good to excellent, but only 14% has been harvested. Brazil is likely over 90% finished with harvest at this point.
• In the US, planting has begun in the South and in the central Corn Belt, but many areas of the Midwest are still receiving rain and may have to wait to begin planting. Despite potential delays, these rains are helping areas with some of the worst soil moisture levels.

WHEAT HIGHLIGHTS:

• Wheat ended the session with gains in all three classes, supported by higher corn and soybean futures, a higher close for Matif wheat, and consolidation of the US Dollar. Initial strength may have also stemmed from news that Israel attacked Iran. However, the market may have largely brushed this news aside as no greater conflict is expected. This may indicate that the grain complex, in general, is seeing a technical bounce from oversold levels.
• Much of the Midwest will see a cooler and drier pattern this weekend, and longer range models are predicting better rain chances for the Southern Plains. Western Kansas may miss much of this moisture though, which may keep their winter wheat conditions on the decline.
• India’s government has reported that wheat stocks as of April 1 totaled 7.5 mmt, down from 8.35 mmt last year and marking the lowest level in 16 years. This could be supportive to futures prices, as India may need to import more wheat to meet their domestic needs.
• SovEcon has reportedly lowered their forecast of Russian wheat production by 1 mmt to 93 mmt, which is still above the USDA figure of 91.5 mmt. Additionally, the Russian Ag Ministry has raised the wheat export tax by 5% to 3,443 rubles per mt.
• Farmers in Argentina are said to have called for the elimination of the 12% export tax on wheat, as they deal with high production costs and low domestic prices, affecting profitability. Wheat planting in Argentina is set to begin around mid-May.
• China expects another bumper crop of grains and oilseeds, attributed partially to increased planting areas for winter wheat and rapeseed. Government subsidies and favorable domestic prices are encouraging farmers to expand their operations as China aims to achieve a total grain production of 50 million metric tons by 2030.

DAIRY HIGHLIGHTS:

• Spot Cheese had a big day with blocks improving 7 cents while barrels improved 5 cents. Spot cheese now sits at its highest level since November at $1.67/lb. Spot whey gained an additional 0.75 cents to close at $0.3925/lb.
• Class III futures were supported by the cheese market. Both the May and June contracts posted more than 40 cent gains on the day. The 2024 Class III average now sits at $17.47/cwt.
• Spot butter and powder were uneventful on the day. Butter went unchanged at $2.92/lb while powder lost an additional 0.25 cents at $1.12/lb.
• Class IV futures saw small improvements but with uneventful product trading for Class IV futures saw very light volume trading on the day. The 2024 Class IV average now sits at $20.57/cwt.

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Author

John Heinberg