Written Commentary
US Dollar Lower on the Day
April 19, 2024
by Steve Freed, VP of Grain Research
Grains are mixed. SN is up 2 cents and near 8.45. CN is down 2 cents and near 3.18. WN is down 1 cent and near 4.97. US Stocks are higher. US Dollar is mixed. Crude is higher.
More of the same. Corn futures are lower and giving back some of the recent gains. Futures remain in a trading range. Today’s US ethanol weekly report should show a slow and slight rebound in production and slight drop in stocks. Margins are improving but demand is still below before the virus. Corn prices are supported by unknown summer US weather and talk of lower acres but drop in demand and fact current weather is favorable for crops offers resistance. Fact US farmer still has a large amount of old and new corn to sell offers resistance. New US farm aid could slow farmer selling. Funds are still large net shorts.
Soybean futures are also in a trading range. Key remain will china buy large amounts of US soybeans. US prices to China are still a premium to both Brazil and Argentina. China says they will buy based on the Phase 1 deal but lack of new sales add to uncertainty. Soymeal prices are near season lows. Talk of lower US 2019/20 exports and higher US 2020 final acres offers strong overhead resistance. Funds are net long but could get tired of position unless there are new China sales or some weather issue.
Wheat futures continue to struggle. Funds are net short futures. USDA negative MAY World 2020/21 estimate continue to offer resistance. Talk of rains in US south plains weighs on KC prices. Colorado crop tour estimates crop below USDA estimate but Kansas crop is improving from early dryness. Dryness in Europe and parts of south Russia is supportive. Record high Russia flour prices could also be supportive. Fact most World buyers have little forward coverage could also provide support near seasons lows.
Managed funds were net buyers of 1,000 contracts of SRW Wheat; net bought 4,000 Corn; net sold 2,000 Soybeans; net sold 1,000 lots of Soymeal, and; net sold 2,000 Soyoil. We estimate Managed Money net short 10,000 contracts of SRW Wheat; net short 226,000 Corn; net long 27,000 Soybeans; net short 19,000 lots of Soymeal, and; net short 3,000 Soyoil.
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