Written Commentary
CORN
Prices are $.01-$.04 lower as spreads also weaken. Inside trade for July-25 with overhead resistance at the 100 day MA at $4.72 ½ SC regions of Brazil will need to see improved rainfall by month end to maintain favorable growing conditions for their 2nd corn crop. After yesterday close the USDA reported there was 421 mil. bu. of corn used in the production of ethanol in Feb-25, slightly above expectations. In addition Jan-25 usage was revised up by nearly 11 mil. bu. bringing YTD usage to 2.755 bil. bu. up 1.3% from YA, vs. the USDA forecast of up .4%. Today’s report from the EIA showed ethanol production rebounded to 1,063 tbd LW, or 312.5 mil. gallons, up from 310 mil. the previous week. There was 106.5 mil. bu. used in the production process, or 15.2 mil. bu. per day, above the 14.86 needed to reach the USDA forecast of 5.50 bil. bu. In the MY to date there has been 3.184 bil. bu. used, or 15.24 mbd, an annualized pace of 5.561 bil. Ethanol stocks slumped to 26.6 mil. barrels, below expectations. Implied gasoline demand last week slumped 1.7% to 8.495 tbd, which was well below YA usage of 9.236 tbd.
SOYBEANS
Prices were mostly lower with beans down $.03-$.05, oil surged another $.01 per lbs. while meal fell to new contract lows down $4-$5 per ton. Spreads weakened in beans and meal while mostly higher in oil. Inside trade for July-25 beans as support at the 100 day MA held. Next support for spot meal is at $284.30, the low in March for the spot weekly chart. The market shrugged off the announced sale of 135k tons of US soybean meal to the Philippines. July-25 oil has surged to a 5 month high with next resistance at 49.46. Reports that the biofuel industry, big oil and the EPA support raising volume mandates for green diesel to near 5.5 bil. gallons annually from the current 3.35 bil. continue to provide fuel for the soybean oil surge. Combined bio and renewable diesel capacity has held steady at 6.575 bil. gallons annually for the past 5 months, well above the current mandated blending levels. Spot board crush margins increased another $.05 ½ to $1.36 while bean oil PV surged to 45.8%, matching a 2 year high. Census crush in Feb-25 at 189 mil. bu. was in line with expectations, however below the 193.4 mil. in Feb-24 given the 1 extra day. In the first 6 months of the 24/25 MY cumulative crush has reached 1.232 bil. bu. up 5.3% from YA, in line with the current USDA forecast. Oil stocks fell 8% to 1.923 bil. lbs. well below expectations for an increase to 2.268 bil. lbs. Heavy storms have been moving across the nation’s midsection today with snow on the backend in the northern plains. Rains this week are expected to be heaviest in the Southern Midwest and Ohio Valley region with some areas seeing 8-10+”. Early plantings will surely be pushed back while localized flooding could require some fields to be replanted.
WHEAT
Prices were mixed today with CGO and MGEX steady to $.02 lower while KC futures were up $.02-$.03. Resistance for July-25 KC comes in at its 100 day MA at $5.86 ¼. So far rains have missed key growing areas in the SW plains. Their best chance for precipitation comes later this week. Russia hasn’t accepted the US proposal to stop the war in Ukraine citing not enough of their demands have been met. Ukraine’s wheat exports in April are expected to slip to 1 mmt, down from 1.1 mmt in March. Exports to date for the 24/25 MY have already reached 13 mmt, vs. the USDA forecast of 15.5 mmt for the MY that ends in June. Grain traders in Australia are forecasting this year’s wheat output may only reach 28.6 mmt, down 16% from the previous year’s crop due to drought conditions. Monday’s cut in winter wheat acres was the largest drop from Jan to March in over a decade. Final acres have fallen from the March surveyed estimates in each of the past 3 years.
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