PM Comments April 30 2024
Good afternoon. Lower trade was seen at the CBOT on Tuesday, as large deliveries against May beans, wheat, and bean oil led traders to hit the 'sell' button. The large amount of soybean oil deliveries highlight the poor demand for soybean oil that currently exists. Spot soy oil futures on Tuesday traded to their lowest level since January of 2021.
CN closed Tuesday at 4.46 3/4, down 2 1/2 cents. CZ was 3 1/4 lower at 4.69 1/2. SN finished at 11.63, down 19 cents. SX was down 18 1/2 cents at 11.59 1/2. WN traded down to its 100-day moving average at 5.96 before bouncing and closing at 6.03 1/4, down 5 1/4. Products were lower, July bean meal traded to its highest level in nearly three months before closing at 351.90, down $2.40/ton; and July bean oil closed at 43.01, down 1.36. Livestock markets closed mostly lower, June live cattle closed at 174.97, down $2.17, August feeders closed at 255.50, down $4.12, and June hogs closed unchanged at 102.47. June live cattle as an open chart gap from 176.97 to 176.57. Outside markets are mixed, crude oil futures are down around $1/bbl, the Dow Jones index is down 450 points, and the US$ index is up 70 points.
Spreads were firmer, corn spreads were generally 2-3 cents higher, while soybean spreads were 3-4 cents higher. The CK/CN closed at -7 1/4, and the SK/SN closed at -17 1/2. SK/SN again made new lows this morning at -23, before turning around and closing higher on the day.
As of this writing, we have not seen or heard any update from the Biden admin. on the SFA/GREET model announcement. Sources say an announcement is still expected this afternoon, though few other details are known. Part of today's sell-off in soybean oil was attributed to ideas that the model would slash subsidies for renewable fuels made with soybean oil.
Port strikes in Argentina by oilseed workers continued for a second day on Tuesday, significantly disrupting exports of corn, soy, and wheat. A local source said there are no operations at the ports. The trade assumes the strikes will not be long-lasted as the Argentine workers need money and will soon return to work. These strikes are fairly common in the South American country and typically don't last more than a few days.
Other news out of Argentina today included the lower house of Congress approving President Javier Milei's economic reform plan. This is the same bill that was voted down in February, but after months of negotiations and concessions, Milei now has a few allies in the lower house. The "omnibus" bill will now make its way up the Senate if enough of the articles are individually sanctioned, where it is expected to receive significantly stronger opposition.
According to an article posted by Reuters, the US and China will hold in-person climate talks in Washington in early May. Sources familiar with the subject said US climate change diplomat John Podesta and his Chinese counterpart Liu Zhenmin would be meeting to resume bilateral talks on climate cooperation; this comes amid simmering tensions between the two nations over trade and national security. This will be Liu's first visit to Washington after taking over the position in January. Sources believe the visit will occur May 8-10, when Liu is also scheduled to travel to New York. The two climate representatives have maintained strong personal ties of late, even as the two nations have seen deteriorating relations over the past several months.
This morning's consumer confidence reading for April did little to stoke investor confidence, coming in at 97.0 vs expectations of 104.0. The reading was also well below March's 103.1 reading. According to chief economist Dana Peterson, elevated prices for food and gas were at the top of the list of consumer concerns, with politics and global conflicts also mentioned. Stock index futures traded to near 0.75% losses following the report's release.
The lesser accurate of late GFS model added moisture for the Eastern Corn Belt in the week 2 period at mid-day, but the general pattern was otherwise unchanged. Low pressure systems will continue sweeping through the country every 3-4 days, bringing rain/storms. Confidence beyond 5 days is low with any of the models, as exact location/amount of rainfall is hard to pinpoint. Planting delays look to persist across much of the Corn Belt, and specifically the North, at least through this weekend. Temperature forecasts remain mostly the same; cool air enters the Northern part of the Corn Belt starting Thursday but doesn't stretch as far South as previous cold bouts. Temps will be well above average in the East into the end of the week, before cooling to more moderate but still above average levels next week.
Cooler temps have crept into the 5-10 day forecast for Southern growing regions in Argentina, possibly bringing worries of frost. Otherwise there was no pattern change noted at mid-day for the broader South American weather forecast.