CORN HIGHLIGHTS:

• A quiet news day led to selling pressure in the corn market as prices are overall trending sideways to lower, caught between losses in the soybean market and mixed trade in the wheat futures. Technically, corn markets are testing and for today holding support levels under the corn market.
• The USDA released crop progress and planting pace for corn on Monday afternoon. Currently, the corn crop is 6% planted, slightly below expectations and 1% above the 5-year average. Big planting jumps were seen in Missouri, North Carolina, and Kansas. Typically, corn is 27-30% planted by the end of April.
• Weather forecasts and the planting pace will now be the focus of the corn market. Expectations are for temperatures to stay above normal into the end of April, but precipitation looks to stay active during this time window. A wetter pattern may slow planting progress into next week.
• The US Dollar maintained its upward momentum, which is limiting the rally potential in the corn market, as the strong dollar index makes exports originating from the US more expensive.

SOYBEAN HIGHLIGHTS:

• Soybeans closed lower for the second consecutive day and again were bear spread with the front months posting the bulk of the losses compared to the deferred months. Both soybean meal and oil closed lower as well, but soybean oil had larger losses as it followed palm oil lower.
• Today, crushing group Abiove revised their estimate of Brazilian soybean production higher to 160.3 mmt which throws more confusion into the mix as the USDA kept its estimate at 155 mmt, and CONAB remains much lower at 146 mmt. The discrepancy between estimates is strange considering that 85% of the crop is now reported as harvested.
• Yesterday’s Crop Progress report showed soybean planting at 3% complete in the US, which is up from the trade guess at 2% and also up from the 5-year average of 1%. The 7-day forecast features a good amount of rain for eastern Texas as well as central Midwest.
• Yesterday’s NOPA crush report was bearish as it showed soybean oil stocks higher than expectations at 1.851 B/lbs compared to the trade guess of 1.79. Soybean crush was a record for the month of March at 196.406 mb but was below expectations.

WHEAT HIGHLIGHTS:

• Wheat ended the session mixed; Chicago contracts were lower, while KC and Minneapolis were marginally higher. The US Dollar Index continues to climb higher limiting upside potential, and a lack of new fundamental supportive news is keeping wheat relatively rangebound.
• The USDA’s Crop Progress report from yesterday indicated a 1% decline in the winter wheat condition, now at 55% rated good to excellent, compared to 27% at this time last year. Additionally, 11% of the crop is now headed, surpassing last year’s 9% and the 7% average. Moreover, 7% of the spring wheat crop has been planted, contrasting with 2% last year and the 6% average.
• Ukraine’s winter crops, particularly wheat and barley, are reported to be in favorable condition by Ukraine’s Hydrometeorological Center. Despite relatively dry conditions this month, the crops have benefited from unseasonably warm temperatures since January, potentially leading to a production level meeting or exceeding last year’s, as suggested by the head of agriculture at the weather center.
• In contrast, the USDA ag attaché in Ukraine has forecasted a decrease in grain production and exports for 24/25, potentially due to the ongoing war rather than weather factors. Profitability concerns since the onset of the conflict may lead to reduced acreage for the upcoming marketing year, and logistical challenges in the Black Sea region may hamper exports.
• According to the Australian Bureau of Meteorology, the El Nino weather pattern has concluded, potentially paving the way for La Nina conditions. However, uncertainties remain regarding the shift to La Nina, contrary to some forecasts. If La Nina does manifest, it could bring cooler and wetter weather to eastern Australia.

DAIRY HIGHLIGHTS:

• May 2024 Class III milk futures have rallied an impressive $1.29 per cwt over the last three trading sessions alone on increased cheese demand.
• The block/barrel cheese price tacked on another 4c Tuesday to $1.61/lb, its best close since February 29. 
• Butter added 2c to $2.94/lb, as it closes in on the $3.00/lb mark. Whey also had a strong up day, gaining 2c to $0.38/lb.
• The recent rally in Class III has begun to tighten the spread between III and IV. That spread is still wide, however, currently at $3.05/cwt.
• The Global Dairy Trade Auction today wasn’t great. The GDT price index rose 0.10%, but cheese was down 8.50% and butter fell 1.40%.

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Author

John Heinberg