Grains are mostly lower to close:
July Corn -2 1/4 cent/bu (6.25 1/2)
July Soybeans + 1 cents/bu (14.73 1/4)
May Chi Wheat – 12 1/2 cents/bu (6.67)
Cdn $ +0.00540 (75.075 cents)
WTI Crude Oil -1.10/barrel (82.16)
Grains started out the day very strong as the Rosario Grain Exchange cut their estimate of soybean production in Argentina from 27.0 million tonnes to 23.0 million tonnes yesterday after the close. With this news, soybeans came out of the gate up 18 cents at the high but fell lower this morning as Conab raised Brazil's output of soybeans by 2.2 mmt and increased exports too. The company also raised their corn crop estimate from last month, but second corn production is a little smaller.
STUNNING weather also weighed on prices today as it continues to favor a speedy planting pace for the core of the cornbelt. 85% of the cornbelt is posting over 50-degree soil temperatures which is the minimum temperature needed for germination. It was announced today that the CPC projects that El Nino is 62% probable May-July. El Ninos are generally beneficial to US row crop production.
Export sales for the week ended April 6th were fine -within expectations (on the low end)- but not special. 375,000 tonnes of corn sales were previously announced in USDA Flash Sales, so that was the base from which other corn sales were added (which did not amount to much). This morning we saw a flash sale of 327,000mt of corn sold to China (191,000 for 2022/23 and 136,000 for 23/24). This is the first flash since March, where we saw 11 flash sales to China in 13 days. As for soybeans, China is ahead of last year by 1.8 mmt but the non-China business is lagging by 8.2 mmt. Marketing year to date corn export sales fall short of the seasonal pace needed to hit USDA's target by 63 million bushels, versus being short 54 million the previous week. Marketing year to date soybean export sales fall short of the seasonal pace needed to hit USDA's target by 48 million bushels, unchanged on the week.
Political conflict is high. China is preparing for war against Taiwan, according to Taiwan’s foreign minister Joseph Wu. Whether that’s imminently true or not is difficult to tell. If that conflict heats up, it is assumed that relationships and trade between China and the U.S. will be strained. Additionally, Russia stated today that there will be no extension of the UN-brokered grain deal beyond May 18 unless the West makes significant changes to remove obstacles that continue to block the export of its grain and fertilizer, according to Reuters. Despite this story being bullish to wheat prices, it seems as though the market has a bit of headline fatigue and are either not reacting, or not believing the story out today.
The Canadian dollar rose to a near two-month high against its U.S. counterpart on Thursday, as softer-than-expected U.S. inflation data put pressure on speculators that have raised their bearish bets on the currency to the most in four years.
Funds were thought to have been all sellers today.