Written Commentary
US Dollar Likely to Trend Higher
April 18, 2024
MORNING OUTLOOK
Grains are lower. SX is down 2 cents and near 12.81. SMZ is near 340.1. BOZ is near 56.74. CZ is down 3 cents and near 5.25. WZ is down 4 cents and near 7.13. KWZ is down 5 cents and near 7.17. MWZ is down 3 cents and near 9.07. US stocks are mixed to lower. US Dollar is higher. Crude is higher.
US stocks and grains are lower as China Evergrande missed a payment. US debt ceiling deadline Oct 1. US Fed see transitory inflation enduring. US, EU and China economy slowing due to Delta spread. Low Nat Gas supplies and higher winter demand has GS est Crude to test $80 and possibly $90.
Due to new emission targets, China ordered soybean plants in Jiangsu and Tianjin to shutdown. China is also seeing coal shortages and high energy prices forcing rationing of rural electricity use. Dalian futures soymeal and soyoil are higher on plant shutdowns. Corn, soybean and rapeoil higher.
Could see some evening of grain futures positions as month end, quarter end, USDA report nears. USDA est US Sep 1 corn stocks near 1,187, soybeans 175. Corn supply feels lower. Wheat guess 1,800. US soybean export commit only 852 mil bu vs 1,301 ly. Corn 982 vs 889. Big corn harvest weekend.
US weather dry. S plains rains next week. EU and Baltics dry. Ukraine, Argentina drying. Russia rains.
US Sep 1 Cattle on feed estimated near 98 pct. Sep 1 hog inventory also est near 98 pct.
IGC raised World 21/22 corn crop 7 mmt; US up 6, Ukraine up 1. Wheat down 1 mmt. EU/Canada down. Russia talking about rationing wheat exports after Jan 1. Traders buying wheat selling corn spread. Matif wheat futures higher on talk of China buying EU/US wheat. China has 9.2 mmt wheat TRQ.
EU corn harvest slowed due to Nat Gas shortage and high energy prices to dry harvested crop. Brazil farmer increase cash soybean sales due to weaker currency. Brazil dropped corn import tax. Argentina corn crop 8 pct planted. acres up to 7.1 mha vs 6.6 ly. Baltic freight near 13 year highs.
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