Grains ended the week on a strong note, as increased tensions in the Middle East along with a somewhat wet forecast added risk premium back into grains. For the day, corn closed 6 cents higher, soybeans closed 16 higher on old crop and 11 higher on new crop, and wheat closed up 13 cents in Chicago, and 4 to 7 cents higher in KC. The outside markets were mixed, with crude oil up 41 cents, gold up $16, and the dollar was up 0.002. The Dow Jones index rallied 211 points, while the NASDAQ dropped 2% or 319 points.
New tensions overnight as Israel retaliated against Iran with some reported drone strikes. Iran has downplayed the attack and said there are no plans for retaliation. Crude oil prices didn’t seem too concerned about the attacks, but the ongoing conflicts in Iran/Israel and Ukraine/Russia need to be watched closely. It feels like this conflict isn’t going away anytime soon.
The USDA reported two flash export sales this morning. Mexico bought 8.5 mln bushel of corn , split between the current marketing year and next. There was also an announcement of 4.4 mln bushels of soybeans sold to UNKNOWN for the 23/24 and 24/25 crop years.
It was reported today that Indian wheat stocks in their government warehouses fell to their lowest levels in 16 years after 2 straight years of drought. This gave some support to the wheat market, as their stocks 3 years ago were close to 25 mmt, and today they are reported at 7.5 mmt. India has a population of 1.417 billion people, compared to China at 1.412 billion. We don’t talk much about India in our commentaries, but don’t be surprised if they start purchasing some cheap US wheat.
The EPA announced the temporary expansion of higher ethanol gasoline blends this summer. They are trying to help reduce the potential disruptions that could be caused from the Geopolitical issues taking place in Ukraine and the Middle East. E15 sales are typically changed to E10 from June 1 to Sept. This is the 3rd year in a row that the Biden administration has expanded the E15 usage timeframe.
Corn futures have been stuck in a narrow 23 cent trading range since the beginning of March. The recent high has been $4.48, while the low has been $4.245. While the corn market was up 6 cents today, for the week the May contract lost 2 cents. Below we show the May ’24 daily corn chart since last August.
Soybean futures have been under selling pressure but found some buying come in near the trendline support area. The May ’24 contract traded down to the $11.3175 level, which was within 3 cents of the February lows of $11.285. Is that close enough for a double bottom? The recent high back in March was $12.2675, so soybeans have had almost a 99 cent trading range the past two months. The chart below shows the May ’24 contract since last August. The May ’24 contract lost 23 1/2 cents on the week.
Wheat futures had a nice gain of 13 cents today, with a trading range of 23 cents on the day. The nearby May ’24 contract shown below has been in a 53 cent sideways trading range since early March. Wheat has been battling improving crop conditions and timely rainfall in the SRW areas. The geopolitical conflicts have given wheat some support, but need more fund buying to get prices back closer to $6. A rally in wheat would give corn a boost if that happens, and we would consider pricing more old crop wheat. May ’24 wheat futures lost 5 3/4 cents on the week.
Going home for the weekend, the latest 6 to 10 day maps show above normal temps, along with above normal precip for much of the Midwest. The latest 8-14 day maps are showing the same. 14 days out from today is May 3, and if this forecast holds together, planting delays could start being seen. While it doesn’t take a big planting window to get the crop in, the chance of getting a lot of acres planted in April is dwindling. Soil moisture conditions are improving, which could keep us on track for above trend yields this year with normal summer rainfall.
That’s all for today. See you here Monday.
