CORN HIGHLIGHTS:

• Strong wheat markets and short covering in the agriculture space helped push corn futures higher in the session. The corn market rallied 13 cents off Friday’s low as managed funds covered some of their short positions that were added to last week.
• On Friday’s Commitment of Traders report, managed funds grew their net short position in the corn market to a total of 279,570 contracts, adding a net 16,010 short contracts as of April 16. Beyond corn, managed funds are holding their largest net short in the Ag commodity sector in 4 ½ years. The ag sector in general saw strong buying across the board on Monday.
• Weekly corn export inspection hit a marketing year high on Monday at 64 mb (1.64 mmt). Mexico was the top export destination for US corn last week. Total export inspections are up 35% from last year, while the USDA is targeting a 26% year-over-year increase.
• Despite wet and cool conditions across most of the Corn Belt last week, corn planting is expected to reach 12% complete as of Sunday, April 21, and ahead of the 5-year pace.
• Over the next two weeks, weather models are predicting warmer, but wetter than normal conditions into the month of May. The planting pace is off to a good start, but increased precipitation could slow progress going into May.

SOYBEAN HIGHLIGHTS:

• Soybeans closed sharply higher for the second consecutive day for a total gain of 27 ½ cents over the past two days. There was not much news to explain this rally, but it is likely that a large amount of short covering was occurring, and wheat was the primary leader in the grain complex today. Both soybean meal and oil ended the day higher, but soybean oil posted the majority of the gains.
• For the week ending Thursday, April 18, soybean inspections totaled 16.0 mb which were within the range of trade guesses. Total inspections for 23/24 now total 1.414 billion bushels which is down 18% from last year, and the USDA is estimating total soybean exports at 1.720 bb which would be down 14%.
• A large part of the recent selloff in soybeans has been due to the decline in exports from last year. This morning, it was reported that Chinese soybean imports from the US have been cut in half for the month of March while Brazilian imports increased by nearly the same amount. This is not particularly surprising as Brazilian soybeans are much less expensive than US soybeans, and China’s poor hog margins are discouraging feed consumption.
• As of April 16, managed funds reportedly sold 28,565 contracts of soybeans which increased their net short position to 167,875 contracts. This puts funds near their record short position but also puts funds in a position to cover those short contracts if fundamentals become more bullish.

WHEAT HIGHLIGHTS:

• Wheat closed sharply higher today, with gains of over 20 cents in Chicago, with KC and Minneapolis contracts not far behind. Paris milling wheat also jumped, with the May contract gaining 9.00 Euros per metric ton. There wasn’t a lot of fresh news to propel the market higher, which may indicate that it was a correction from oversold conditions with fund short covering. There was some Russian destruction of Ukrainian grain infrastructure over the weekend, but this was likely not the main driver today.
• Parts of Europe and the US southwestern Plains had frost concerns over the weekend. While damage is not expected to be a major issue, this news may have lent some support to the strong rally in wheat today. In addition, the Canadian prairies are too dry and need some moisture to recharge their soils.
• According to SovEcon, Russian grain exports last week totaled 1.25 mmt. Of that total, 1.07 mmt was wheat – for reference, the previous week was 1.14 mmt of wheat. Furthermore, they also reduced their estimate of the Russian wheat crop by 1 mmt to 93 mmt due to hot weather that may affect yields.
• IKAR has said that Russia’s FOB wheat export values ended last week at $208 per mt – that is down from $210 the week prior. IKAR also increased their Russian wheat export estimate by 1 mmt to 53 mmt, vs the USDA at 52 mmt.
• Weekly wheat inspections at 16.5 mb were decent and in line with expectations. This brings the 23/24 total inspections to 604 mb, down 8% versus last year, with inspections running below the USDA’s estimated pace.

DAIRY HIGHLIGHTS:

• Spot cheese jumped 9.50 cents on an 8-cent jump in blocks and an 11-cent jump in barrels, closing at $1.7650/lb. This is the highest closed since September 19, 2023.
• Unsurprisingly, Class III futures liked the spot trade. Second month May futures closed up 58 cents while June and July were both up more than 40 cents.
• Spot butter had itself a great day as well with an 8-cent jump to $3.00/lb on 15 loads traded. Powder was unchanged at $1.12/lb.
• Class IV futures were green but all over the place. The second month May contract was 4 cents higher to $20.24.
• March milk production was down 1.0% YoY at 19.603 billion lbs. Cow numbers came in at 9.335 million head, down 98,000 head from last year and down 7,000 head from February.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

Amanda Brill