Written Commentary
OPENING COMMENTS
GEOPOLITICS:
US Treasury Secretary Scott Bessent said “there will be de-escalation” between the US and China regarding the trade war. The timing of any sort of deal or change to the current situation is unclear, but Bessent said it will be in the “very near future”. This followed his comments that the tariffs back and forth between the US and China is unsustainable. President Trump changed his tune drastically in a press brief where he said “we’re going to be very nice” (to China). Also, Trump reversed his tune toward Jerome Powell as some of his advisors urged him to back off the Fed Chair for the equity market’s sake. That does not mean we are out of the woods yet. The next Fed meeting rate reveal is on May 7th.
MACROECONOMICS:
Mortgage rates hit a 2-month high with 30-year fixed rates now averaging 6.9%. That is the highest since February. Applications to take out mortgages fell 12.7%. A 15-year fixed-rate mortgage now averages 6.16%. In comparison to this time 2022, the average 30-year mortgage rate then was 4.72% and the 15-year fixed rate was 3.91%.
AG FUNDAMENTALS:
ARC estimates that corn planting in the US will reach near 25% and soybeans between 18-21% planted. A mixture of rain and clear weather has allowed for both drought recovery, softening the soil, and pockets to both work ground and plant. The next 5 days has a chance of rain over most of the wheat belt, missing most of Illinois, and touching the southern half of the northern plains. Ethanol estimates are expecting another slight drop in ethanol production last week. The average estimate is 1.007 million barrels per day. Ethanol stocks are also expected to decline week-over-week. The average guess is 26.64 million barrels. The US dollar is slightly higher this morning, but still below 100.0 on the index. Ukraine’s wheat production is basically unchanged at 19.9 MMT but there is still risk of drought lowing that number. Russian export values have cheapened recently alongside European prices.
Export & World News
Jordan purchased 60K MT of hard milling wheat from optional origins. South Korea is looking to buy up to 50K MT of milling wheat from the US, and they are also in the market to buy around 80K MT of rice.
Malaysian palm oil futures traded slightly higher overnight, up 68 ringgit.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
Weather Outlook
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