PM Comments April 29 2024
Good afternoon. Choppy start to the new week at the CBOT as the grains were lower and soybeans/meal were higher. Old crop beans traded slightly lower just briefly at mid-morning before rallying to new highs for the day and closing in the middle of the range. Widespread weekend rainfall has halted planting operations for a lot of the Corn Belt, with it likely to be next week before planters return to fields in many areas.
CN closed Monday at 4.49 1/4, down 3/4 of a cent. CZ was also 3/4 lower at 4.72 3/4. SN was 4 3/4 higher at 11.82. SX closed at 11.78, up 3 1/4. WN finished at 6.08 1/2, down 13 3/4. Products were sharply mixed, July bean meal closed at 354.30, up $9.60/ton, and July bean oil closed at 44.37, down 1.17. Meal had an outside day higher, while bean oil had an outside day lower. Livestock markets were mostly lower, June live cattle were down $1.42 at 177.15, August feeders were down 92 cents at 259.62, and June hogs closed unchanged at 102.47. Outside markets are mixed, crude oil futures are 90 cents to $1/bbl weaker, the Dow Jones index is up 75 points, and the US$ index is down 30 points. The $ index has had an inside day so far to this point in the session.
Spreads were weaker to start the week, corn spreads were unchanged to a quarter cent lower, and soybean spreads were down 2-4 cents. The CK/CN closed at -10, while the SK/SN dropped all the way out to -21 3/4 before closing at -21 1/4.
Rainfall amounts were the talk of the ag markets to start the first week of May, as Midwest producers look to have several days to get caught up on rest/repairs this week. Wheat futures have ended their winning streak as forecast rain for Russian wheat areas has caused traders to exit long positions. The July Chicago contract will see support this week just below $6 at the 100-day moving average, which comes in at 5.96 1/2. However, a turn-around-Tuesday is possible tomorrow as this afternoon's weekly ratings report looks to show further deterioration in the g/ex category for the winter wheat crop. Corn futures extended their sideways trade to begin another week, as old crop futures have struggled to do anything but trade sideways since bottoming in late February. Trade sees planting progress as of Sunday at 27% complete, while soybean seedings are seen 17% complete.
This morning's weekly export inspections report was mostly in line with trade expectations for all three main crops. Corn inspections for the week ended April 23rd totaled 1.226 mmt's, which was at the upper end of trade guesses between 958k, and 1.4 mil mt's. Current pace is 32% ahead of last year. Soybean inspections were expected to be fairly poor and ended up being just that; total for the week was 250k mt's, compared with expectations for 185k-500k mt's. Current pace is 18% behind last year. And wheat inspections were seen at 481k mt's, compared with trade guesses of 300k-550k mt's. Current pace is 7% behind last year. Of note, China shipped out a cargo of both wheat and sorghum, but no corn or soybeans.
In the latest update to the dairy cattle/bird flu saga, the USDA on Monday announced it was collecting samples of ground beef at retail stores in states with outbreaks for testing. The agency said they remain confident the meat supply is safe, but wanted to verify as the virus continues to spread. Both the CDC and the WHO have asserted that the overall public health risk is low, but those with exposure to infected animals have a higher risk of infection.
Financial markets were quiet Monday as data was limited to individual cooperate earnings reports for the most part. As mentioned this morning, this week's FOMC meeting on Tuesday and Wednesday will be the talk of the markets for the week, and likely key price direction for the next several sessions. Back last winter, traders and economists had originally seen the May meeting as the potential starting point on rate cuts, though now just a day ahead of meeting, this not happening is all but a foregone conclusion.
Not a lot of weather change was noted at mid-day. Storms look to exit the Northeast Tuesday into Wednesday, with another system making its way through the Northern Plains at mid-week. A third system is then seen for the end of the week, which again looks to bring widespread rainfall to most of the areas the received it this past weekend. Models beyond two weeks continue to advertise a shift to a drier pattern for the Eastern half of the US, but confidence is low. The Corn Belt is getting a significant moisture recharge going into a new growing season. Temps will be average to above average to start this week, before cooling slightly at mid-week and into the weekend. Like with precip, long range models still see an above average chance at warmer than usual temps into the middle of the May, but confidence is lacking.
No update for South America, where most of Brazil is hot and dry over the next week. Far SE Brazil sees heavy rains that delay the little soybean harvest remaining.