Grains are higher in overnight trading:
Corn + 3 ½ cents/bu (May @ 5.83 ¼ )
Soybeans + 1 ½ cents/bu (May @ 14.16 ¾ )
Chi Wheat + 5 ½ cents/bu (May @ 6.34 ¼ )
Cdn $ -0.00060 (79.525 cents)
WTI Crude Oil -0.19/barrel (59.41)
Grain futures have traded both sides of unchanged in the overnight session although all grains sit at or near their highs for the day. Yesterday saw massive fund buying of corn and wheat futures, dry weather in Brazil and rumors of renewed Chinese buying interest for American corn buoyed the market. Wheat values were also supported by the realization that drought areas continue to expand in both the northern USA Plains and in the western Canadian prairies. Soybeans traded higher on the overall support from the rest of the grain complex and on renewed buying interest in soyoil, although concerns over soymeal demand are hanging over the market, as are abundant Brazilian soybean supplies.
Today, the market is all about what the USDA will reveal in it’s April Supply and Demand Reports, due out at noon ET. The rapid shipment of corn out of the USA over the past month, along with increasing USA ethanol production rates, and new Chinese export buying all have traders expecting to see a big cut to USA 2020/21 corn ending stocks. Soybean stocks are already uber tight, so any changes to the bean balance sheet are expected to be minor. It is almost impossible to predict what the USDA will do today, although my bias is to friendly numbers. In the meantime, there are some fantastic old crop and new crop hedging opportunities in the market right now!!
The Buenos Aries Grain Exchange cut their estimate for Argentine bean production by another million tonnes overnight, now pegging the crop at 43 million tonnes overall. The Exchange estimate of Argentine corn production was left unchanged @ 45 million tonnes.
The USA Midwest will see some scattered rainfall activity in the eastern Corn Belt over the next couple of days, but other than that, conditions will be mostly dry through the middle of next week. The southern Plains look to get heavy rainfall in the 6 to 10 day window, but other than that, USA production zones are mostly dry with slightly below normal temperatures through most of the rest of April. Argentina is getting excellent rainfall right now, which is expected to continue for the next 5 days. Brazil on the other hand, is only getting scattered precipitation, with forecasts coming in drier in extended models, thereby expanding dry areas.