CORN HIGHLIGHTS:

• Corn futures faded off early session strength but finished mostly higher on the session to end the week. Strong buying in both the wheat and soybean markets supported corn futures. For the week, the July corn futures traded higher for the second consecutive week gaining 10 ¼ cents, and the highest weekly close since January.
• The Buenos Aires Exchange cut its projection for the Argentina corn production estimate to 46.5 mmt from 49.5 mmt. This newest projection is down 10 mmt from the early season estimate. Final production of corn in Argentina has been impacted by insect, disease, and weather damage.
• Weather conditions in southern Brazil remain a concern with heavy rain and flooding impacting corn and soybean harvest in the region. Central Brazil is trending drier with high temperatures, which could pressure the development of the second (safrinha) crop corn.  These concerns have added some weather premium into the corn market this week.
• 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.
• Managed money is still estimated to hold a large net short position in the corn market. The concerns this week have helped trigger a short covering rally. The weekly Commitment of Traders report later this afternoon will give a clearer picture regarding the money flow in the corn market.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day sharply higher for the third consecutive day with the July contract up 52 cents and November up 41 ½ cents since Wednesday. Soybean meal has been the driver behind the gains in soybeans with another higher close today although soybean oil ended the day lower. Issues with harvest in South America have provided support.
• For the week, July soybeans gained 37 ¾ cents ending at 1215, November soybeans gained 26 ¼ cents to 1201, July soybean meal gained a whopping $27.50 for $372.20, and July soybean oil lost 2.46 cents closing at 43.08 cents. Soybean meal has been the clear leader as major harvesting delays in Argentina due to excessive rains threaten yields and therefore soybean meal exports.
• 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.
• This week’s export sales report was relatively poor for soybeans at 15.5 million bushels and export shipments at 9.9 mb, but this morning, private exports reported to the USDA a flash sale of 122,000 metric tons of soybeans for delivery to unknown destinations during the 23/24 marketing year.

WHEAT HIGHLIGHTS:

• Wheat closed sharply higher in both the Chicago and Kansas City classes, with Minneapolis posting more modest gains. Today’s drop in the US Dollar Index was supportive, while fund short covering is likely the main driver of the market’s current momentum. Concerns regarding dryness in Russia and Australia, along with the worst flooding in southern Brazil since 1941, have all lent support to the wheat market.
• Paris milling wheat futures surged higher today, helping the US market. The September contract gained 7.25 Euros to 235.00, closing well above the 200-day moving average. Prior to breaking through this resistance last week, it has not traded above that average since July of last year.
• This week, rains in Russian wheat growing areas were less than expected. This is causing production concerns and adding support to futures pricing. IKAR reportedly decreased their Russian wheat production estimate by 2 mmt to 91 mmt, while also reducing their export estimate by 1.5 mmt to 50.5 mmt. For reference, the USDA is using a figure of 91.5 mmt of production with exports at 52 mmt.
• Wheat planting continues to move forward in Australia, but more moisture is needed. The hope is that the transition from El Nino to La Nina will bring rain to recharge the soils. Friday and Saturday storms should bring precipitation to eastern regions, but the area may be limited to the northern part of New South Wales.
• From a technical point of view, the July contracts of both Chicago and KC futures ran into resistance at their 200-day moving averages again. After rallying above that level for the second time in as many weeks, both classes closed below it today, and it may take more friendly news to see wheat rally significantly above these levels.

DAIRY HIGHLIGHTS:

• Spot cheddar was neutral today closing at $1.8350/lb. Spot whey saw 10 loads traded to gain half a penny at $0.3950/lb.
• Class III futures were able to carry momentum over to Friday with the July contract trading over 40 cents higher before drifting back some. All remaining 2024 contracts were in the green with the 2024 Class III average gaining 9 cents to go home at $17.92/cwt.
• Spot butter was up 1.75 cents on the day making for a weekly gain of 10.50 cents to close at $3.0750/lb. Spot powder had a modest day trading 1.25 cents higher at $1.13/lb.
• Class IV futures were green across the board with products trading higher. The 2024 Class IV average gained 10 cents to $20.71/cwt.

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Author

Amanda Brill