CORN HIGHLIGHTS:

• A strong wheat market supported the corn market for the third consecutive day, but technical resistance and large supply picture limited gains.
• Corn futures saw follow-through buying as the nearby contracts closed above the 50-day moving average on Monday for the first time in over three weeks. May futures also posted their highest daily close since February 9.
• The planting pace is still running ahead of the 5-year average.  On the weekly crop progress report, corn planting reached 12% complete. This is up 6% from last week and 2% ahead of the 5-year pace.
• Weather models are predicting warmer, but wetter-than-normal conditions over the next two weeks. The current corn planting pace is off to a good start, but increased precipitation could slow progress going into May.
• The next few sessions could bring choppy trade to the corn market. May basis contracts will need to be priced or rolled in the next handful of days, May corn options expire on Friday this week, and first notice day for May futures is April 30.  All three events will likely bring some volatility and price movement into the corn market.

SOYBEAN HIGHLIGHTS:

• Soybeans closed higher for the third consecutive day with the July contract gaining 33 cents since last Thursday’s close. Today, July beans may have met some resistance at the 50-day moving average, and a rally above that level could be significant. Futures were bull spread with the front months gaining on the deferred, likely as a result of short covering ahead of first notice day on April 30. Both soybean meal and oil ended the day higher.
• The USDA’s Crop Progress report was released yesterday afternoon and showed that 8% of the crop has been planted, which compares to 3% last week and is above the 5-year average of 4%. Recent rains have significantly improved soil moisture levels which gets planting off to a good start.
• In South America, the Brazilian soybean harvest is nearly complete while Argentina’s soybean bushels will be coming soon. Brazilian soybean prices remain lower than those of the US, which is likely to keep impacting US export levels. As Argentina’s harvest will result in a significant amount of soybean meal for export, there could be added pressure on US soybean meal prices.
• Yesterday’s export inspections for soybeans were encouraging totaling 16.0 mb for last week which was above the average needed to meet the USDA estimate for the third week, but total inspections are still 18.2% below last year.

WHEAT HIGHLIGHTS:

• Wheat had another strong close, with double-digit gains in all three US classes, despite a neutral to lower close for Paris milling wheat futures. The US Dollar Index did drop today, which may have lent some support. From a technical perspective, both July Chicago and KC wheat closed above their 100-day moving averages today, which may now act as support if the market drops back.
• Speculative traders are believed to be buyers in the ag complex yesterday and today. It will take some time for this to be reflected, if true, in the Commitments of Traders report. If funds are exiting short positions it may help to explain the recent rally over the past few sessions.
• Yesterday afternoon, the USDA released its crop progress report. The winter wheat crop saw a larger than expected good to excellent rating reduction of 5% from last week, to 50%. Moreover, 17% of the crop is currently headed, surpassing the average of 13%. Additionally, the spring wheat crop is 15% planted, exceeding the 10% average and marking a significant increase from the 7% reported last week.
• According to the European Union’s Monitoring Agricultural Resource Unit, warmer than average temperatures in spring along with adequate rainfall have been a benefit to crops across most of the continent. However, too much wet weather in northwestern Europe during the fall and winter may mean that some areas are unlikely to fully recover.
• The wheat planting region in Brazil is expected to decline due mainly to high production costs. Some areas of central Brazil have already seen wheat planting begin, but end users in Brazil may focus more on imports of wheat from Argentina, which is more competitive vs the Brazilian spot market.

DAIRY HIGHLIGHTS:

• After yesterday’s 9.50 cent jump to $1.7650/lb, spot cheese was unchanged on no loads traded today. Whey was down a penny to $0.38/lb.
• Futures for Class III were down roughly 10 to 30 cents between May and September futures. Second month May finished at $18.13.
• Following yesterday’s 8 cent rally, spot butter was down 3 cents today on 7 loads traded. Powder gave up a quarter-cent.
• Class IV milk prices were red today with May through November futures down 7 to 38 cents. July futures were hit the hardest, falling to $20.61.

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Author

Brandon Doherty