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Ag Market View for Apr 8

Soybeans and soyoil traded higher. Soymeal lower. Wheat and corn were sharply higher. Stocks were higher. US Dollar was lower. Energies mixed. Metals higher. 

SOYBEANS

Soybean trade was mixed. A negative weekly US soybean export Sales offered resistance. Strong domestic US soybean basis offered Support. So far soybean futures do not have the weather push that is helping wheat or the expectations that tomorrows USDA will be bullish soybean as much as corn. World vegoil prices are higher but concern over China pig herd due to ASF and lower South America soymeal prices continues to weigh on soymeal values. Still most private analyst could see US 2020/21 soybean carryout below 100 mil bu and some are using US 2021/22 soybean carryout below zero. If realized, SX is too low. Weekly US soybean export sales were a negative 3 mil bu. Total commit is near 2,232 mil bu vs 1,368 ly. China commit is near 35.8 mmt with 2.0 mmt in unknown.

CORN

Corn futures traded sharply higher. Initially there was talk that some money managers were adding long positions before tomorrow USDA report. There were also rumors that China may be looking to buy US old crop corn. Some feel that rumor might be trying to justify today’s rally. Some feel USDA could raise US 2020/21 corn demand and drop carryout below average trade guess of 1,379 nil bu. Most private analyst are using a carryout closer to 1,200. US domestic cash corn basis is higher which is also helping support CK. Beyond this year, US 2021 corn acres guess times a record yield minus normal demand could suggest a US 2021/22 carryout near 850 mil bu. If realized CZ is too low. USDA could also lower Brazil corn crop and raise China corn imports. A few weather watchers are also increasing odds that US summer weather could be drier and warmer than normal. CK tested recent highs near 5.80. A bullish report could push CK over 6.00. CZ  made new contract highs near 4.94 and has now rallied 45 cents in just 6 days. Buckle up.

WHEAT

Wheat futures continue to trend higher. There is increase concern about US north plains and Canada prairie dry conditions. Long range maps hints of some showers late next week but then dryness return. It is also dry in west EU. US south plains and Ukraine. Long range maps also hint of some rain in west US south plains. Weekly US export sales were only 3 mil bu. Total commit is near 925 mil bu vs 920 last year. USDA goal including flour is 985 vs 965 last year. USDA is not expected to make big changes tomorrow US/World wheat supply and demand. WK traded over the 20 day moving average and the downtrend line from the Feb high. 100 day moving average is near 6.31. WK has rallied 35 cents in 6 days. KWK tested the 20 day moving average near 5.80 and has rallied 27 cents in 2 days. There were some rumors that China was looking to buy US HRW. MWK rallied over the 50 day moving average. Next resistance is near 6.50 then 6.60. Futures have rallied on concern over drier than normal 2021 US HRS and Canada weather.

Weekly MPLS wheat futures chart

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