Good afternoon. Corn and soybean futures closed higher on Wednesday in low volume trade as most of the world celebrates the May Day holiday. That corn managed a higher close in the face of both wheat and crude oil being lower to sharply lower was a positive development for the market at mid-week. And for soybeans, cash sources indicate rising FOB offers out of Brazil have made US soybeans more competitive on the world market.
CN had an outside day higher Wednesday and closed at 4.50 3/4, up 4 cents. CZ also had an outside day higher and closed at 4.72 3/4, up 3 1/4. SN was up 7 1/4 at 11.70 1/4. SX was up 5 1/2 cents at 11.65. WN closed at 5.99 1/4, down 4 cents. Products were mixed, July bean mean closed at 349.0, down $2.90/ton, and July bean oil closed at 43.26, up 25 points. Soybean oil had an inside day. Livestock markets traded lower, June live cattle closed at 173.85, down $1.12, August feeders closed at 251.75, down $3.75, and June hogs closed at 100.42, down $2.05. Outside markets are sharply mixed, crude oil futures are down $2.50-2.70/bbl, the Dow Jones index is up 100 points, and the US$ index is down 50 points.
Spreads were mostly higher again today; Corn spreads were around a half cent firmer, while soybean spreads closed 3-5 cents firmer. CK/CN made a new high at -6 1/4, and closed at -7 1/2, while SK/SN continued to narrow back in, closing at -14 1/2.
For the month of April, May corn futures were down 2 1/2; Dec corn futures were down 8 1/4; May soybean futures were down 46 cents; Nov soybean futures were down 26 3/4; and May Chicago wheat futures were up 24 3/4.
Not a lot of new detail on the administration's ruling on credits for SAF, though this accounted for most of the market chatter on Wednesday. Generally speaking, more questions than answers came out of the announcement. At the producer level, farmers are wondering how they will get their piece of the tax credit that is given to the SAF facility. And according to Bloomberg, without carbon sequestration, corn-based ethanol wouldn't qualify for the credit in 2023 or 2024 anyway. Bottom line is that while we have something signed and on paper from the administration, US corn growers are still a long way off from fully capitalizing on the possibilities of a SAF market. From a demand standpoint, the US balance sheet did not get tighter with yesterday's announcement.
Today's weekly ethanol production report was relatively ho-hum; production came in above trade expectations and also above last week, but was still one of the lowest production figures of the year at 987k bpd. Production was up 3.5%% from last week, and up 1.1% from last year. Stocks for the week ended April 26th were seen at 25.488 mil bbls, which was down 1% from last week, but up 9.1% from last year. Corn grind for the week was estimated at 98.3 mil bu, which is a three-week high. Cumulative corn use has reached 3.499 bil bu's, vs the USDA's full-year forecast of 5.375 bil bu's.
The weekly EIA report this morning also showed crude oil inventories for the week were up way more than expected at 460.89 mil bbls. This was a weekly build of 7.265 mil bbls, while the trade had expected a draw down of 1.1 mil bbls. Front month futures lost nearly $1/bbl shortly after the report's release, and continued to fall into the afternoon. The report also showed gasoline consumption for the week at 8.62 mil bpd, which was up 200k bpd from last week.
The USDA's monthly fats and oils report for March showed soybean crush for the month totaled 6.112 mmt's, which was up 5% from Feb, and up 2.9% from March of 2023. Soybean oil produced was seen at 2.406 bil lbs, up from 2.292 bil lbs last month. Stocks of soybean oil came in at 1.872 bil lbs, which was up from 1.688 bil lbs last month. Also out from USDA today was the monthly grain crush report, which showed corn used for ethanol in March totaled 468.75 mil bu's, which was up 5% from last month, and up 7.5% from March of 2023.
According to a rail union in Canada, thousands of workers at two companies have voted to go on strike as early as May 22nd over a proposed removal of rest provisions that are critical to safety. Three groups of workers, which totaled around 9,300 people, each had more than 95% of the vote to authorize a strike. Interestingly, the two rail companies account for almost all of the bulk grain shipping in Canada, which means such activity would come to a near halt. In a comment, executive director of Western Grain Elevator Association Wade Sobkowich said, "There is no plan B because, as we've said for decades, there aren't competitive alternatives." As of the latest talks, the two sides were still far apart on an agreement and now begin a 21-day federally mandated period of mediation.
The US Federal Reserve unsurprisingly held interest rates unchanged for a sixth straight meeting on Wednesday, while also signaling they were still leaning toward eventual cuts. The latest policy statement more or less echoed the previous one, though the Fed seemed to hint that progress towards its 2% inflation target had stalled in recent months. "There has been a lack of further progress towards the Committee's 2% inflation objective," the statement said.
Mid-day weather remains mostly unchanged from the overnight runs. Both the GFS and the EU model see 3-4 storm systems making their way through the heart of the Midwest in the next 10 days, with a pattern shift still noted beyond May 13th. Rainfall is generally seen in a range of 0.5-3", with locally heavier amounts possible. Temperatures look to stay to warmer for the Eastern half of the US for the next 10 days. Also not a lot of change for South America; far Southern Brazil into Argentina is too wet, while the far Southern areas of Argentina see frost risk over the next 10 days. Central Brazil looks to remain unseasonably hot for another 10 days with no moisture called for.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|