Written Commentary
Ag Market View for Apr 23.24
April 23, 2024
SOYBEANS
Off again on again trade was on again. Some feel Thursday break was overdone and rumors of China buying US soybeans were back buying US soybeans helped rally prices. NOAA forecasted US 90 day weather warmer than normal with rainfall drier in PNW and MT and above normal rains in the OH river, Delta and SE. Most look for China 20/21 soybean imports near a record 102 mmt vs 98 last year. 36 mmt from US vs 16 last year, 61 from Brazil vs 70 last year and 3 from Argentina vs 11 last year. Some est China 21/22 soybean imports near a record 105 mmt; US 32, Brazil 64 and Argentina near 5 mmt. Commercials could see China take 40 mmt from US. So going forward, what is the new normal? Soybeans 50-70 cents, soyoil 3 cents? Most still feel USDA is too low for US soybean 20/21 and 21/22 demand. Most also feel that US summer weather outlook may not justify USDA 2021 soybean yield near 50.8.
CORN
Corn futures traded higher. Noon GFS weather model suggested drier US west Midwest weather. Our weather guy sees 2 rain events over the next 2 weeks. Both could see less than and inches in the west and 1.00-2.00 inches in the east. Extended 30 day weather could be warm and dry in west and normal rans in east, Delta and SE. Most still feel USDA is too low for US corn 20/21 and 21/22 demand. USDA est Brazil will export 14 mmt of corn July-Sep. There is no corn at ports to load for export. China announced May corn imports near 3.2 mmt. Season to date imports 11.7 mmt. Some est total imports near 27 mmt vs 8 ly. US 21 vs 2 and Ukraine 6. Same group est China 21/22 imports also near 27 mmt. US 15, Ukraine 9 and Brazil 1. Most feel China will take 30 mmt this year and 40 next year. USDA est that Brazil July-Sep corn exports would be near 14 mmt but there is no corn at the ports to load. Most also feel that US summer weather outlook may not justify USDA 2021 corn yield near 179.5. Next key USDA report is June 30 acreage and June 1 stocks guess. Po Farmer est US corn acres near 93.6 mil versus USDA March guess of 91.1. Goldman Sachs said on Friday the recent slip in commodities prices driven by the U.S. Federal Reserve’s decision to bring forward projections for interest rate hikes into 2023 and maybe 2022 was a buying opportunity for investors. The bullish commodity thesis is neither about inflation risks nor Fed forward guidance. It is about scarcity and strong physical demand. So going forward, what is the new normal? Limit up or limit down corn ?
WHEAT
Wheat futures ended higher. Wheat tended to follow corn. Forecast of drier and warmer US north plains, west Canada prairies and central Russia could eventually offer support to wheat prices. Pro Farmer est US 2021 spring wheat acres near 11.3 mil vs some est near 11.7. US HRW harvest will advance. HRW futures are trying to form seasonal bottom. US SRW harvest is delayed due to rains. Continued wet forecast could begin to raise concern about quality. US SRW farmers talking about record yields. Both HRW and SRW futures could find resistance due to lack of export demand. Both could see record feeding. Goldman Sachs said on Friday the recent slip in commodities prices driven by the U.S. Federal Reserve’s decision to bring forward projections for interest rate hikes into 2023 and maybe 2022 was a buying opportunity for investors. The bullish commodity thesis is neither about inflation risks nor Fed forward guidance. It is about scarcity and strong physical demand. WU ended near 6.65. Range was 6.42-6.71. Next resistance is near 6.76.
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