CORN HIGHLIGHTS:

• Potential planting delays and wetness in Southern Brazil helped push corn futures higher on Thursday. July corn closed at its highest price level since early February.
• Grain markets became concerned about current weather conditions in Brazil and Argentina. Wet weather in Rio Grande Do Sol has damaged the late corn and soybean harvest, which triggered short covering in the soybean market. Central Brazil is trending drier with high temperatures, which could pressure the development of the second (safrinha) crop corn. With these concerns and a corn market holding a large net short position, a short covering rally was triggered on Thursday.
• Weather models are forecasting rounds of precipitation to push through the Corn Belt, which could limit planting until the middle of May. Corn planting is off to a good start, but forecasted rains could push overall progress to delayed or late.
• Weekly exports sales for corn were within expectations. Last week, US exporters registered new sales of 29.9 mb (758,000 mt) of old crop corn and 1.3 mb (33,670 mt) for new crop. Japan was the largest buyer of US corn last week. Total corn sales commitments now total 1.840 billion bushels, up 23% from last year.
• The strong closing and price action at the end of the session could trigger additional buying to start the overnight session. With the market holding a large short position, the possibility remains that price momentum could be turning higher in the short term.

SOYBEAN HIGHLIGHTS:

• Soybeans closed sharply higher today with the July contract breaking out of its recent sideways range and testing highs from early April. The November contract closed right below its 100-day moving average. The rally in soybeans today was fueled by a very significant jump in soybean meal which closed $15.90 higher in the July at $364.90, an increase of 4.56%. Soybean oil closed slightly lower.
• Argentina and S. Brazil are currently dealing with continuous rains that have kept farmers out of the fields and unable to harvest the crop timely. In addition to the rains, temperatures are now forecast to drop in S. Argentina which could cause frost conditions and further damage the crop. This is supportive to soybean meal because Argentina is the number one exporter of the product and any threat to its production could lower Argentine exports giving the export business to the US.
• Today’s export sales report showed an increase of 15.2 million bushels of soybean export sales for 23/24 and an increase of 0.3 mb for 24/24. This was within analysts’ expectations but was on the lower side of the trade range. Last week’s export shipments of 9.9 mb were below the 12.8 mb needed each week to meet the USDA’s estimates. Primary destinations were to Japan, Indonesia, and Mexico.
• March census crush reported by US NASS yesterday afternoon came in at a record high for the month of March at 203.73 mb. While this was a new record, still showing strong domestic demand, the number was below the range of estimates. Bean oil stocks for the month of March were reported at 2.369 billion pounds, though lower than year ago levels, they were higher than trade expectations and are likely weighing on bean oil prices.

WHEAT HIGHLIGHTS:

• Wheat finished the session with modest gains when compared with the surging soybean market. After the reversal off the recent high, one must wonder if wheat would have had a positive close today if it weren’t for the soy rally. Today the US Dollar Index did fade to the lowest level in two weeks, which may have also helped support grain markets.
• The USDA reported net sales cancellations totaling 0.7 mb of wheat for 23/24 and an increase in sales of 15.0 mb for 24/25. The cancellations are disappointing, however, last week’s shipments of 18.7 mb did exceed the 16.4 mb pace needed per week to reach the USDA export goal of 710 mb. Shipments now total 615 mb, which is up 2% from last year.
• Western Kansas and the panhandles of Texas and Oklahoma are set to receive some rain, which should help ease the dry conditions there. Though this will bring relief, more moisture will be needed to eliminate drought conditions. According to the USDA 28% of the US winter wheat area is in drought as of April 30, a 2% improvement from last week’s 30%. However, the spring wheat area in drought increased 1% to 27% for the same period.
• According to their supply minister, Egypt may import as much as 5.7 mmt of wheat during the 24/25 fiscal year (starting in July). Additionally, their current stocks are estimated to be sufficient for three months, with the government having purchased 1.1 mmt from domestic farmers since mid-April.
• India is expected to face severe heat in May, according to their meteorological department. With talk that they will need to import wheat. Elsewhere, rains in southern Russia and parts of Ukraine this week have been less than anticipated. With expectations for a drier pattern to return, this may be supportive to the US futures market.

DAIRY HIGHLIGHTS:

• Class III futures were mostly higher with the second month June contract jumping 36 cents to $18.90.
• Spot cheese hit a new high for the move at $1.83375/lb with a 2.00 cent jump in blocks and 2.50 cent jump in barrels. Whey was also up 1.50 cents.
• US cheese exports in March were the highest ever at 50,021 metric tons, besting the previous record easily from June 2022 at 44,104 metric tons.
• Nearby Class IV futures pushed up as well with the June contract closing at $20.55, up 7 cents from Wednesday.
• After pushing above $3.00/lb yesterday, spot butter was up another 5.25 cents to close at $3.0575/lb. Powder fell three-quarters of a cent.

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Author

John Heinberg