CORN HIGHLIGHTS:

• Corn futures, like the rest of the grain markets, were under pressure during the session. The combination of disappointing export sales, and an overall neutral to bearish USDA WASDE report kept sellers active in the corn market. The weak price action will leave the market open to additional selling pressure into the end of the week.
• The USDA lowered corn ending stocks to 2.122 billion bushels in today’s WASDE report. This was accomplished by adding 25 mb to feed usage demand and 25 md added to ethanol usage. This was still slightly above market expectations but reflected the good domestic corn demand in the first quarter.
• In South American corn production, the USDA stayed relatively unchanged in their production forecasts. The USDA lowered their Argentina corn crop forecast by 1 mmt to 55 mmt, and left the Brazil forecast unchanged at 124 mmt. These numbers still hold a large spread over analyst and private forecasts for each country.
• Weekly corn export sales were disappointing last week at 12.8 mb (325,500 mt). This was a marketing year low and well below the range of analysts’ expectations. Japan was the largest buyer of US corn last week, and total export commitments for the marketing year stand at 1.739 billion bushels, up 17% from a year ago.
• With the USDA report passed, the market will shift its focus to weather forecasts. Expectations are for temperatures into the end of April to stay above normal, which could allow for planting progress to pick up speed for this year’s US corn crop. The biggest near-term concern could be wet planting in the eastern corn belt with predicted rains.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower following a neutral to slightly bearish WASDE report which notably did not show a downward revision in Brazilian soybean production. May soybeans moved further away from and closed well below the 40-day moving average which had previously been support. Soybean meal closed higher while soybean oil was lower along with palm oil.
• Key takeaways from today’s USDA report include the absence of adjustments to Argentina and Brazil’s estimated soybean production, which remain at 55 mmt and 155 mmt, respectively, both above trade estimates. US ending stocks saw an increase to 340 mb from last month’s 315 mb exceeding trade estimates. Furthermore, world ending soybean stocks were slightly lower than the previous month’s estimate at 114.22 mmt, also surpassing the average trade guess.
• This morning before the USDA report, Brazil’s CONAB released their own estimates for soybean production which was decreased to 146.522 mmt and is significantly lower than the 156 mmt that the USDA projected today.
• The weekly export sales report released today revealed an increase of 11.2 mb in soybean sales for the 23/24 season, falling on the lower end of expectations. Last week’s export shipments amounted to 18.5 mb, surpassing the 14.2 mb per week required to meet the USDA’s export estimate of 1.720 bb for 23/24. Primary destinations included China, Egypt, and Mexico.

WHEAT HIGHLIGHTS:

• Wheat prices declined across all three US futures categories, mirroring movements in Paris milling wheat futures. The primary influence today stemmed from the release of the monthly WASDE report, which highlighted elevated US ending stocks and expansions in Russian and Ukrainian exports.
• US wheat ending stocks were estimated at 697 mb, which was above the trade guess of 685 mb and the 673 mb estimate in March. As far as the world numbers are concerned, wheat carryout had little change at 258.3 mmt; the trade was looking for 258.6 mmt and for reference, the March figure was 258.8 mmt.
• Examining specific regions, Argentina’s ending stocks rose to 3.32 mmt from March’s 2.82 mmt, while Brazil’s stood at 1.0 mmt compared to 1.12 mmt previously. Ukraine’s stocks decreased to 1.58 mmt from 3.28 mmt, with Russia remaining unchanged at 12.44 mmt. Notably, the USDA raised both Russian and Ukrainian wheat exports by 1 mmt and 1.5 mmt, respectively. Australian exports were also raised by 0.5 mmt, while the EU saw a reduction of 2 mmt.
• In addition to the WASDE report, the market received weekly export sales data. The USDA reported a 3.0 mb increase in wheat export sales for 23/24 and a 10.1 mb increase for 24/25. Last week’s shipments totaled 23.0 mb, surpassing the 17.8 mb per week needed to meet the export estimate of 710 mb (unchanged from the previous month). Shipments to date stand at 557 mb, down 3% from last year but exceeding the USDA’s estimated pace.
• According to the USDA as of April 9, about 26% of the US spring wheat crop is in drought, a 1% increase from the previous week. In addition, 18% of the US winter wheat crop area is in drought. This is unchanged from last week, but it remains dry in some areas of the southern Plains and western Corn Belt where recent rains have missed. This may be reflected in declining conditions on next week’s Crop Progress report.
• Though nearly unchanged at the time of writing, the US Dollar Index scored a fresh near-term high today at 105.52. The higher the trend goes, the less competitive US exports become. This may be one of the main limiting factors for the nearby wheat market.

DAIRY HIGHLIGHTS:

• Heavy selling in Class III futures had the May and June contracts down more than 60 cents today with the May contract finishing at $16.02.
• The block/barrel average fell 3.6250 cents today to $1.52875/lb with blocks dropping 6 cents on 3 loads traded. Spot cheese enters Friday still up 0.6250 cents on the week.
• The May through September contracts closed in the red today while all others were unchanged. The second month contract sits at $20.20.
• Spot butter found pressure today, finishing 3.75 cents off Wednesday’s close at $2.8925/lb. Powder gained a half-cent, entering Friday up 1.75 cents on the week.

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Author

John Heinberg