CORN HIGHLIGHTS:

• Strong money flow into the grain markets helped to lift corn futures higher on the session. July corn futures closed at their highest point since January 12 as funds continued to cover short positions.
• On last week’s Commitment of Traders report, managed money reduced their net short position to 218,040 contracts, reduced by 20,506 contracts from last week as of April 30. With the recent price action, estimates will have funds under 200,000 short contracts and challenging the lowest net short since the start of the year.
• The USDA will release its next estimate of planting pace this afternoon. Expectations for corn planting are to be 39% complete as of May 5. This would be up 12% from last week, and in line with the 5-year average.
• Weekly export inspections showed good movement for corn exports last week. The USDA inspected 50.8 mb (1.286 mmt) of corn for shipment last week. Total inspections are now at 1.299 billion bushels, up 33% over last year, while the USDA is forecasting a 26% year-over-year increase.
• Weather models are forecasting rounds of precipitation to push through the Corn Belt, which could limit planting until the middle of May. The recent 6–10 day forecast is showing a drier than normal pattern going into the middle of the month. Dry weather would be helpful in keeping the planting pace on target after an overall wet couple of weeks in the Corn Belt.

SOYBEAN HIGHLIGHTS:

• Soybeans closed sharply higher again to kick off the week and have now posted 4 consecutively higher closes with the July contract gaining a whopping 85 ¾ cents since just last Wednesday. Both products closed higher but soybean meal was the clear leader with gains of over 4% as South American flooding threatens yields.
• In Brazil, the last of the soybeans left in the field are deteriorating as heavy flooding disrupts harvest in Rio Grande do Sul. Reuters has estimated that Brazil’s total soybean production could fall by as much as 15% in that state for a total production of 19 to 20 mmt where the previous estimates had been closer to 22 mmt.
• Today’s soybean export inspections were within the range of trade guesses at 12.8 mb for the week ending Thursday, May 2. This was greater than last week’s inspections but still put the total for 23/24 at 1.438 billion bushels, which is down 18% from the previous year. The USDA is estimating total soybean exports at 1.700 bb for 23/24 which would be down 15% from last year, but that number could change in Friday’s Supply and Demand report.
• Friday’s CFTC report surprisingly showed funds as net sellers of 222 contracts of soybeans as of April 30, which increased their net short position to 149,236 contracts. It should be noted that the more significant rally came the following day with the July contract gaining 37 ¾ cents on the week.

WHEAT HIGHLIGHTS:

• Despite a weaker start to the session, possibly influenced by rains in the southwestern Plains, all three US wheat classes closed sharply higher. Support came from the surging soybean market and expectations of continued dry weather in Russia and Ukraine. Additionally, Paris milling wheat futures saw a significant jump, with the September contract gaining 10.25 euros per metric ton, marking its highest level since mid-September 2023.
• Weekly wheat inspections at 11.8 mb bring total 23/24 inspections to 634 mb, which is down 7% from last year. Inspections are currently behind the pace to meet the USDA’s goal. There will need to be about 55 mb more wheat exports in May to reach the USDA’s 710 mb export goal.
• IKAR has reportedly lowered their estimate of Russia’s wheat crop by 2 mmt to 91 mmt. There is talk that there may be a further decline to 90 mmt. And with dry weather anticipated to continue into mid-May, there may be cuts to both Russian and Ukrainian wheat production down the road. In addition, IKAR has also said that the Russian wheat export values rose by four dollars last week to $216 per mt.
• Managed funds bought back a signification amount of wheat last week. The combined short position in all three US classes now totals only 87,000 contracts. This is the smallest net short position since September of last year. Between April 23 and 30, their short position in Chicago wheat, in particular, declined by about 37%, from just over 76K contracts to just under 48K.

DAIRY HIGHLIGHTS:

• Spot cheese closed green on Monday for the fifth day in a row. The market added 2.625c to $1.86125/lb on 4 loads traded.
• Class III futures reacted positively to the bidding in cheese, with each contract from June to October hitting new contract highs intraday.
• Class IV followed the move higher, with a few contracts finishing the day double digits higher as contracts march closer to the $22 mark.
• After the close, this month’s Dairy Products report showed US cheese production for March was up just 0.10% from a year ago.
• Total butter production for March was up 1.40% year-over-year.

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Author

Brandon Doherty