Good morning Farmer Family …
US farm markets were mixed but mostly higher on Friday.
Corn prices rose 2.15%.
Wheat gains have been even better, as Chicago SRW rallied 2.32%, Kansas City HRW climbed 3.96%, and MGEX HRS jumped 3.15%.
Soybeans, in contrast, failed to follow suit retreating 0.03% lower.
The rest of the soy complex was also weaker, with soymeal eroding 0.84% lower, while soyoil went home with 0.11% losses.
Corn prices climbed making a fourth straight week of gains, amid demand from ethanol producers, and a week of flash sales to China.
On Friday, private exporters reported to the USDA having sold another 382,000 metric tons of corn for delivery to China.
Of the total, 246,000 metric tons is for delivery during the 2022/2023 marketing year and 136,000 metric tons is for delivery during the 2023/2024 marketing year.
Wheat prices bounced back from a three-week low earlier in the session, as markets assessed weather conditions, with colder weather expected in the U.S. Southern Plains.
Between Saturday and Monday, large portions of northern Missouri, Iowa, northern Illinois, Wisconsin and Michigan will gather at least 0.75” additional moisture, per the latest 72-hour cumulative precipitation map from NOAA.
The agency’s new 8-to-14-day outlook predicts near-normal precipitation for most of the Corn Belt between April 21 and April 27, with cooler-than-normal conditions likely for the northern U.S. during that time.
Meantime, a senior Russian diplomat said on Friday the West still has time to remove “obstacles” hindering the implementation of the Black Sea grain deal before a deadline on May 18, in a context in which Russia has signalled it may not agree to extend it, unless the West removes obstacles to the export of Russian grain and fertiliser.
Ongoing Ukrainian shipments through the corridor, despite inspection delays, and large Russian exports have tempered immediate worries about Black Sea wheat trade.
But, the U.N. Secretary-General has written to Russia, Ukraine and Turkey to raise concerns about the implementation of the deal, saying that no ships were inspected on Tuesday.
Soybeans, in contrast, edged down after Thursday’s one-week high, with a record Brazilian harvest tempering concern about drought losses in Argentina.
Argentina’s Buenos Aires grains exchange on Thursday said farmers would likely leave large tracts of soy fields unharvested due to damage from a historic drought.
But Brazilian farmers will produce record volumes of soybeans and corn this season, state statistics agency Conab said on Thursday.
For the week, corn prices gained 3.54%.
All three US wheat markets finished with plus signs for the week, thanks to Friday’s double digit gains.
Chicago, indeed, was up 1.04% since prior Friday.
Kansas City rose by 1.65%.
Minneapoilis spring wheat was under pressure most of the week from rapid snow melt (and thus future planting progress) but netted a 0.48% gain for the week thanks Friday rally.
The soybean complex was mixed for the week, with beans gaining 0.54%, meal was 1.19% stronger, but soy oil dropped 2.83%.
Notably, May 2023 CBOT soft red winter wheat contract (SRW), was up 7 cents on the week, closing at $6.83/bu.
KCBT hard red winter (HRW) was up 14 cents, at $8.79/bu.
MGE hard red spring (HRS) was up 4 cents at $8.76/bu.
CBOT corn contract was up 23 cents at$6.66/bu.
CBOT soybean was up 8 cents, at $15.01/bu.
CBOT soymeal was up $5.4 smt at $459.7/ smt.
CBOT soyoil was down $0.87 at $53.66.
On Monday the weekly Crop Progress report from USDA showed winter wheat as 27% good or excellent, 1 point lower than last week and 5 points below last year’s 32% rating.
Winter wheat rated as fair was 36%, and winter wheat rated poor to very poor was 37%.
Winter wheat headed was 7%, 1 point ahead of last week and 3 points above the 5-year average of 4%.
Spring wheat planted came in at 1%, up from zero last week but below the five-year average of 4%, as cold temperatures and snow covered key portions of the Midwest.
Corn planting was 3% complete by last Sunday, slightly ahead of the 2% average pace.
USDA made minimal changes in their domestic balance sheet for corn on Tuesday.
Notably, they trimmed the import by 10 mbu to 40 million but pulled the use out of FSI for an UNCH 1.342 bbu carryout.
The trade was expecting a tighter carryout on average.
USDA left their cash average price for old crop corn at $6.60/bushel.
However, globally, USDA trimmed Argentina’s output by 3 MMT to 37 MMT, though in line with the pre-report estimate, and partially offset by a bigger Brazilian corn output this season.
Thus, global carryout was only 1 MMT tighter (after a slight boost to Ukraine exports) at 295.35 MMT.
As for soybean, the USDA said in Argentina soy production will fall to a 23-year low, cutting their productin by 6 MMT to 27 MMT.
While, Brazilian output was up by 1 to 154 MMT.
However, USDA trimmed China’s 22/23 soy crush by 1 MMT.
Thus, the net global stocks figure increased by 280k MT to 100.29 MMT.
As for wheat, USDA’s April WASDE report increased the wheat carryout by 30 mbu to 598 given reduced feed and residual and a 5 mbu import increase.
By class, the HRW and SRW stocks were cut by 11 and 14 mbu respectively but were offset by a 31 mbu looser spring wheat carryout and a 21 mbu looser white carryout.
Global S&D shifts included a 2 mbu stronger import for China to 12 MMT.
Ukraine saw a 1 MMT higher export figure, and Russia was given 1.5 MMT higher exports, coming out of the EU and Argentinian shares.
On net compared to March global wheat trade was reduced by 1.2 MMT and global stocks were 2.15 MTM tighter to 212.7 and 265 MMT respectively.
On Wednesday, the U.S. Energy Information Administration said ethanol production faded to a daily average of 959,000 barrels for the week ending April 7.
That put production at the lowest level since early January, down by 44k bpd from last week.
However, stocks tightened by another 8k barrels to 25.128 million.
Weekly Export Sales data released on Thursday had 527,719 MT of old crop corn sales from the week that ended 4/6.
Old crop corn’s accumulated commitment reached 37.74 MMT, or 80% of the current USDA forecast, compared to the 90% average pace for this date.
As for soybean, the report has indicated old crop soybean bookings were 364,539 MT in the week ending April 6.
Commitments are now 92% of USDA’s forecast total vs. the 5 year average of 95% for this date.
As for wheat, the report showed bookings of 135,680 MT.
That put total wheat export commitments at 18.371 MMT as of April 7.
That is still 6% below a year ago and 87% of the USDA full year export projection, vs. the 102% average pace.
In this context, corn basis bids were mostly steady across the central U.S. on Friday but did inch a penny higher at an Ohio elevator while eroding 9 cents lower at an Iowa processor.
Soybean basis bids held steady across the central U.S..
As for wheat, basis ended the week mixed as slow export demand persists while buyers remain cautious about booking new crop shipments, and weather-related supply issues remain at the forefront of the discussion.
Notably, HRS basis was up in the Gulf and steady in the Pacific Northwest (PNW).
Demand from steady PNW buyers lent support, and a rapid temperature increase in the Northern Plains raised some concern for spring planting.
HRW basis was steady in both the Gulf and the PNW, supported by drought-related supply concerns.
SW prices decreased to remain competitive with other origins, and the SRW basis remained steady, supported by domestic demand.
As a result, as of April 13, 2023, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $375/mt (down $9/t from prior week).
US wheat No 2 Soft Red Winter (SRW) was valued at $282/mt (down $3 from prior week).
Northern Durum offers from the Great Lakes, for May 2023 delivery were quoted at $10.34/bu ($435.00/MT -$55/MT ), down $1.51/bu from the prior week.
As for corn, US corn 3YC (Gulf) was at $293/mt (up $2 from prior week).
As for soybean, US soybean 2Y (Gulf) quoted at $592/mt (up $3 from prior week).
USDA’s weekly Ethanol report showed prices were UNCH to 6 cents lower for the week from $2.30 to $2.42/gal regionally.
Corn oil quotes were up 1 to 2 cents to 51-55 c/lb regionally.
The DDGS market was mostly lower, within $20/ton of UNCH from $235 – $285 regionally.
DDGS prices to the Export Point averaged between $272 to $340/ton, stronger from prior week.
USDA marked the MN B100 average price at $4.24/gal, steady with last week.
After the sessions close, Friday’s Commitment of Traders report showed the large managed money spec firms were adding to their modest net long position, up 5,565 contracts for the week to 27,112 net long.
They added more longs than shorts.
Commercial short hedges declined 12,419 contracts for the week, suggesting they are still struggling to buy corn from the producers.
That position is still roughly 30 thousand contracts larger than it was in early March.
As for soybean, the CFTC report on Friday showed the managed money spec funds reducing their net long in soybeans by 20,942 contracts in the week ending 4/11.
It was still 125,022 contracts net long as of that date.
As for wheat, the report showed the large spec funds expanding their already sizeable net short position in Chicago wheat another 17,164 contracts, to -104,247 as of April 11.
They maintained a net long of 9,229 contracts in KC wheat on that date.
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We wish you a nice day and a good weekend.
Author: Sandro F. Puglisi
