NOTE: Ag commodity markets are closed today, so this commentary will not update. Morning Market Review will return by 7:30 a.m. Central Time on Monday, April 22. Thanks for reading.
Soybeans: Up 1
Wheels turn in a few areas but more rain is on the way
Grain futures are mixed this morning as trading begins to wind down into the Easter weekend. Markets close for Good Friday in the U.S., and some in Europe and Asia will stay down for Eastern Monday. U.S. markets begin trading again electronically at their normal times Sunday evening.
Another storm brought rain from Indiana to Texas overnight with another system due in the next week. While some areas in the western Corn Belt will see lighter totals, the official 6 to 10 and 8 to 14-day forecasts out yesterday and the latest updates from the ensemble model this morning are warm and wet for much of the U.S.
Growers are slowly getting into the field, at least in some areas. Work continues pick up speed in parts of the far eastern Corn Belt, while areas to the west are beginning to dry out a little too. A farmer in western Iowa yesterday said 75% of ammonia is on with ground in good condition. But to the north in Minnesota, spring has barely begun. “It’s raining, maybe more than an inch on already saturated fields,” said a grower west of the Twin Cities. “Only good thing about it is it might pull the frost out.”
Farm Futures wants to know what farmers are experiencing as the spring of 2019 unfolds with your Feedback From The Field. Click the link to tell us what’s happening in your area and we’ll publish regular updates featuring first-hand accounts from growers.
Other markets also have a cautious tone. Stocks traded lower in Asia before rebounding a little in parts of Europe. U.S. indexes drifted lower as investors wait for the Mueller report for their holiday reading. Safe havens attracted buying, lifting gold, Treasuries and the dollar to gains.
Crude oil is again testing $64 a barrel after reversing lower Wednesday. Crude oil inventories fell last week on declining imports and production, though diesel stocks in the Midwest built on rising production as refinery capacity utilization rose after seasonal turnaround. That kept energy markets firm.
Problems on the river system caused a surge in urea prices yesterday, with spot barges jumping a reported $30 a ton while swaps for May up $11.50 to $258.50. High water could close the Mississippi River north of St. Louis into the end of April, limiting the number of empty barges making it down stream to load new supplies of urea, which is expected to see greater demand due to corn planting delays.
Corn prices are little changed, keeping to a range of less than two cents in choppy overnight trade. Attempts at a rally faded after two hours in Europe, but May held another test of the bottom of its small uptrend off April 9 spike lows.
Export sales reported this morning are expected to beat last week’s tepid showing of 21.6 million bushels, but questions remain about the strength of U.S. demand in the face of what look like good crops from South America that will compete for business this summer. Rains in much of Brazil look spotty for the next two weeks, though safrinha corn planted behind soybeans is reported off to a good start.
Ethanol production rose last week but stocks fell, helping firm prices as the peak summer driving season approaches. Still, ethanol will need a surge of demand from E15 to meet USDA’s already lowered corn usage total for the 2018 crop.
The preliminary report from the CBOT showed daily futures volume 16% lower Wednesday at 366,476 while open interest fell 13,743 despite modest new fund selling as traders liquidated May. Options volume was down 9% to 779,468, two-thirds of it calls with active new interest noted in out-of-the-money July calls and the December $3.20 and $3.70 calls. Implied volatility in at-the-money December options rose to 20.05%
Overseas markets are mixed today. May futures in China lost 5.1 cents, gapping lower to close at $7.03 while June Paris futures in midday trade are unchanged at $7.729 after adjustments for volumes and currencies.
Bottom line: Corn is trying to hold on for a planting rally, but traders aren’t biting yet, believing the crop can be planted quickly thanks to modern technology. Large old crop supplies are also limiting gains. For more, see my Corn Outlook. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily.
Soybeans are trying to keep modest gains after getting a bounce following lower trade early in the overnight session. May held a tick above yesterday’s bottom, which was the lowest trade since the start of November.
Export sales out at 7:30 a.m. CDT will show if China bought any more soybeans last week after stepping back from the market for the most part recently. Little news from trade talks this week left the market drifting.
The preliminary report from the CBOT showed daily futures volume up 2% yesterday to 228,837 while open interest rose 17,753 on modest new fund selling. Options volume was up 12% to 62,822, 64% of it puts with active new interest noted in the July $8 and $7.60 puts. Implied volatility in at-the-money November options rose to 15.73%.
Oilseed markets internationally are mixed. May soybean futures in China lost a dime to $13.432, May rapeseed futures in Paris midday trade are unchanged at $9.223 and Winnipeg canola overnight gained 1.5 cents to $7.658 after adjustments for currencies and volumes.
Bottom line: Old crop carryout is still burdensome. With more acres likely than USDA found March 29, rallies on a trade deal with China are the best hope for making old crop sales. For more, see my Soybean Outlook. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily.
Wheat prices are mixed as the market continues to come under pressure from large supplies and few threats to new crop production. Winter wheat contracts held above this week’s lowest while the nearby in Minneapolis ticked above yesterday’s high.
Export sales last week reported this morning are expected to improve from last week’s 17.4 million bushels but remain below the rate needed through the end of May to reach USDA’s forecast for the 2018 crop.
Overseas markets are lower today. May futures for Eastern Australian Wheat settled 4.9 cents lower at $6.973 and May futures in Paris midday trade are down 1.5 cents at $5.64 after adjustments for currencies and volumes. Both those markets close for Good Friday and Easter Monday.
Volume in soft red winter wheat was off a third yesterday at 148,098 while light fund short covering took 1,429 off open interest. Options volume dropped nearly in half to 22,924, 52% of it calls as traders liquidated May puts that expire at the end of next week along with the July $4.40 put. Implied volatility in at-the-money July options fell to 21.24%.
HRW volume eased 1% to 88,758 on open interest that was up 7,982.
Bottom line: Acreage in 2019 is the lowest on record but winter wheat looks off to a very good start. And export demand remains limited in a highly competitive world market. For more details on the outlook, see the Wheat Outlook. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily.
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