Good afternoon. Another day of higher wheat trade on Thursday, as the bulls are going for a 'perfect week' tomorrow with Chicago futures having closed higher every day so far this week. Friday afternoon's COT report will be interesting, as fund managers have surely covered a sizeable number of contracts in the previous few days. A wet weekend appears to be in store for most of the Midwest, which likely halt most planting operations.
CK ended Thursday at 4.41, up 3 1/4. CZ finished at 4.76 1/4, up 3 1/2 cents. SK closed at 11.62 3/4, down 3 1/4. SX was a penny higher at 11.75 1/2. WK closed at 6.02 1/4, up 7 3/4. This was the first spot close above $6 since February 7th. Products were mixed, May bean meal closed at 343.90, down $2.10/ton, and May bean oil closed at 44.82, up 16 points. Bean oil made new lows for the week this morning before turning around and closing higher. Cattle markets were higher, June live cattle closed at 177.80, up $2.55, and May feeders closed at 246.25, up $2.15. Outside day higher for live cattle. June hogs closed at 105.00, down $2.45. Outside markets are mixed, crude oil futures are trading 60-80 cents/bbl higher, the Dow Jones index is down 500 points, and the US$ index is down 20-30 points. The Dow is roughly 250 points off its lows.
Spreads were lower, corn spreads traded a quarter cent weaker, and soybean spreads were down 1 1/2 to 4 cents. CK/CN made new lows for the week and closed at -11. SK/SN made new contract lows at -17 and also closed there.
Another choppy day at the CBOT. Wheat managed to drag corn along for the ride again, though the market remains below Wednesday's highs. Soybeans traded lower to sharply lower through mid-morning, before catching a bid and closing at the high end of the day's range. Tomorrow will likely be another day of short covering, with fund managers again reassessing risk going into another weekend. Corn/soybean specific chatter has been light this week, with almost of the talk centered on the wheat market.
This morning's weekly export sales report showed a good week of corn sales, a poor week of soybean sales, and a ho-hum week of wheat sales. Corn sales at 1.3 mmt's were above the upper end of trade expectations of 400k-900k mt's for the week ending April 18th. Featured buyers were Mexico (390,500 mt's), Korea (252k mt's), and Japan (233,200 mt's). Of note, unknown canceled/rolled 219,400 mt's for the week. Sales are currently up 20% vs last year. Soybean sales were seen at 211k mt's, below the lower end of trade guesses between 300k-600k mt's. Featured buyers for the week were China (165,500 mt's) and Mexico (87,800 mt's). Unknown canceled/rolled 136,800 mt's in the week; cash traders say China switched these sales to them, and then canceled one of the cargoes. Sales are currently down 18% vs last year. Wheat sales were seen at 82k mt's, compared with trade expectations of (100k)-100k. Featured buyer for the week was China (72,200 mt's). Unknown canceled/rolled 98k mt's, which like the soybeans, cash traders say was China. Sales are currently up 1% vs last year.
Other notes from the export sales report include soymeal sales for the week totaling 308,000 mt's, which was within trade expectations; soyoil sales were above trade expectations at 16,000 mt's. Exports for 2024/25 in the week included 372k mt's of wheat, 262k mt's of corn, and 120k mt's of soybeans. New crop sales of corn and soybeans are down significantly vs last year, and well below historic averages.
The weekly drought monitor update for this week continued to show improvement in drought conditions for most of the Midwest. As of April 23rd, 61% of the corn producing area is experiencing zero drought conditions of any type, while 63% of the soybean area in the country is in the same condition. For the Midwest specifically, just 23% of the region is experiencing D1-D4 drought, and when you include the D0 (abnormally dry) rating, the region only sees 42% of the area in these conditions. Iowa continues to improve as well, with now just 2.7% of the state in 'extreme drought', vs 7.4% last week and 35.2% on January 1. Illinois sees just 11.7% of the area in D0-D4 drought, while Indiana has 0% of the state experiencing drought conditions of any type.
Reuters reported this morning that the Biden administration is expected to release a climate model for its SAF subsidy program on Tuesday of next week, according to officials with knowledge of the subject. The ruling will determine how US ethanol producers can use climate-smart agriculture to qualify for tax credits in the production of SAF. Corn farmers are hopeful the administration adopts the Dept. of Energy's GREET model, though dialogue at the beginning of the month led most to believe this wasn't likely, at least as it was then written.
Stock index futures took it on the chin Thursday, as this morning's GDP data showed US economic growth slowed more than expected in the first quarter. According to the Commerce Dept., Q1 GDP increased at a 1.6% annualized rate, while economists had looked for an increase of 2.4%. Other data Thursday included initial jobless claims for the week ended April 20th, which came in lower than expected at 207,000, down 5,000 from last week. Continuing claims were also lower than expected at 1.781 mil, down 15,000 from last week. The unemployment rate for March was seen at 3.8%, down from 3.9% in February. Jobs data continues to confirm ongoing tight conditions in US labor markets.
Mid-day weather is like the overnight runs for the US. The Midwest sees rainfall of 1-3" over the next 4-5 days coming from two rounds of low pressure systems, with the heaviest totals seen in KS/OK/AR/MO. The GFS is slightly farther East with its precip locations, but otherwise the models are in good agreement. Local amounts will be hard to pinpoint, as a lot of the moisture will come in the form of thunderstorms, with possible hail and high winds accompanying it. Long range models continue to run in agreement that one more low pressure system possibly brings cool air to the Eastern US into the first week of May, before a warmer/dryer pattern emerges.
South American forecast trended drier for Central/Northern Brazil in the noon run, but offered the same general forecast. Heavy rains are seen for a small pocket around Uruguay, with near normal rain seen for Northern Argentina. Heat continues to be advertised for South/Central Brazil over the next 10 days. As an update, our contact in Brazil still feels a lot of the safrinha corn in the North and Central areas is quite good, and does not seem overly panicked over the current forecast.
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