Written Commentary
CORN
Prices range from down $.03 in old crop to $.03 higher in new crop. Old crop spreads widened while new crop spreads firmed a touch. July/Dec dipped back below $.20 on signs of slowing domestic usage. Today’s rebound in Dec-25 stalled just shy of its 50 and 100 day MA’s that converge near $4.54. Precipitation over the next week will continue to favor the S. Plains, stretch east across the Gulf coast and Delta region and up thru much of the ECB. Much lighter totals for the Great lakes region with little to no moisture for the NW corn belt and northern plains. Yesterday afternoon the USDA reported 454 mil. bu. of corn was used for ethanol production in Mch-25, down 4% from YA and below expectations. In the 1st 7 months of the 24/25 MY corn usage has reached 3.210 bil. up less than 1% from YA and in line with current USDA forecast. The FAO Food Price Index rose 1% in April to 128.3 led by increases in cereal, dairy and meat prices. Lower sugar and vegetable oil prices held to increase in check. The index still remains 20% below its peak in Mch-2022 shortly after the Russian invasion of Ukraine.
SOYBEANS
Prices were mixed today with beans up $.06-$.09, meal was $2-$4 higher while oil pulled back 25 points. Spreads firmed in soybeans, weakened a bit in oil and mixed in meal. July-25 beans remain stuck in a $10.40-$10.65 range. July-25 meal continues to consolidate just below $300 ton. Inside trade for July oil as it closed at the midpoint of today’s range. Spot board crush margins pulled back $.03 ½ to $1.29 ½ bu. with bean oil PV dipping just under 46%. Markets drew support from signs that trade tensions between the US and China are beginning to thaw. Chinese officials have stated the US has reached out to Beijing a number of ways looking to begin trade negotiations. They also indicate they are evaluating whether to accept the US offer to negotiate. Some US officials insist that any trade deal would require China to live up to their Phase 1 agreement on Ag. purchases from the US back in 2020, just before the Covid outbreak. A WSJ report suggests Beijing is considering ways to address Pres. Trumps concerns over China’s role in the fentanyl crisis in the US as a means to jump start trade talks. Census crush showed nearly 207 mil. bu. were processed in March, slightly above expectations. It also represents a record high for March. In the 1st 7 months of the 24/25 MY cumulative crush has reached 1.439 bil. bu. up 4.8% from YA, vs. the USDA forecast of up 5.8%. After bumping up their crush forecast 10 mil. bu. in April to 2.42 bil. look for no change in this month’s WASDE report. Bean oil stocks jumped 8% to 2.079 bil. lbs. above expectations of 1.940 bil. That said however, without a reinstatement of the blenders credit, the current USDA est. for bean oil used in biofuel production at 13.250 bil. lbs. is too high.
WHEAT
Prices were $.12-$.15 higher across the 3 classes. CGO July made a new high for the week before pulling back a touch. MGEX July held above its contract low before surging. Outside day up formation on the chart. For today at least the rallied stalled just below its 50 day MA resistance at $6.13 ½. Little in terms of fresh news to support today’s price jump. Too much rain across key US winter wheat growing areas could fuel quality concerns as the crop is heading. Cool conditions with some frost in NE Europe has also generated headlines. A cool/dry pattern for the Black Sea region while dry conditions in EC China may also provide some pause for concern after reaching new contract lows this week in both CGO and KC futures. Although MM’s have been net buyers across the 3 classes of wheat the past 3 weeks, their combined short position at 163k contracts is still historically large.
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