AM Comments May 2 2024
Good morning. Thin trade has produced higher markets to start Thursday's session, with not a lot of fundamental change noted overnight. Today and tomorrow will likely be short covering days by managed money, as we have reached the time of year when nobody wants to be caught too short going into a weekend. Weather forecasts can change drastically in 48 hours. There is also a significant amount chatter regarding Friday's COT report already, as the trade is curious where the funds stand in the soy products, as well as wheat. Corn futures are trading 4-6 cents higher, soybean futures are trading 12-15 cents higher, and the Chicago wheat market is up 6-10 cents. Products are higher, soybean meal is trading $3-5/ton higher, while soybean oil is trading around 20 points higher. Outside markets also mostly higher, crude oil futures are up 75 cents/bbl , the Dow Jones index is up 200 points, and the US$ index is unchanged.
Today's Reports: US Weekly Export Sales; US Trade Balance; US Weekly Jobless Claims
- Deliveries for Thursday morning included 223 corn contracts, 386 soybean contracts, 211 wheat contracts, 477 soybean oil contracts, and 11 soybean meal contracts.
- This morning's weekly export sales report is expected to show corn sales in a range of 650k-1.3 mil mt's, soybean sales in a range of 100k-700k mt's, and wheat sales in a range of (100k)-100k mt's. Totals for all three crops looks to be similar to last week.
- The USDA's Fats and Oils report for March, released yesterday afternoon, showed soybean crush for the month totaled 203.73 mil bu; this was up 5% from February, and up 3% from March 2023.
- Soybean oil production was seen at 2.406 bil lbs, which was up 5% from Feb, and up 3% from last year. Oil stocks were seen down 0.8% from last year at 2.369 bil lbs.
- Also out of the USDA yesterday was the monthly Grain Crush report for March. The report showed corn used for ethanol was up 7.5% from March of 2023 at 468.75 mil bu's. DDG production was up 13.3% from last year at 1.932 mmt's.
- While the Fed did leave rates unchanged yesterday, the Central Bank also said they would start scaling back the pace of Quantitative Tightening starting on June 1, allowing only $25 bil in Treasury bonds to run off each month, vs the current $60 bil.
- Financial markets Thursday will be keyed by weekly jobless data out this morning, as well as another long list of corporate earnings reports, headlined by Apple. Stock index futures have had inside days technically early this morning.
- Radar this morning shows rains falling across the Northern Corn Belt in IA/MN/WI. Eastern KS/NE also picked up additional moisture, as well as the far South into the Delta, where rain is not wanted.
- The GFS continues to trend wetter than the EU model for the Eastern Corn Belt over the next week, though both models still see an additional 3 storm systems effecting the mid-section of the country over the next week.
- Long rang models continue to indicate a pattern shift coming at mid-month, though confidence is not great. The progressive pattern of low pressure troughs sliding out of the Rocky Mountains looks to remain until at least the second week of May.
- High temps will top out in the East today and tomorrow, before cooling to slightly more seasonal levels early next week. Both models see warmer temps to the East and cooler temps to the West over the next 5-10 days.
- Argentina trended wetter over night, but otherwise the South American pattern remains unchanged as well. Rains are unwanted for the most part in Argentina where harvest has already been delayed.