Closing Markets: Corn: -2.50 old & -3 new.
Beans: -8 old & -10 new. Wheat: -3.50.
Good evening!
Market Recap-
Happy Friday. CBOT ag markets finished the week on a lower note this afternoon, with broad-based commodity selling in a host of outside markets - mainly metals - the main reason for the weakness throughout the day. In the 2023 calendar year, gold futures traded a range of roughly $322/oz; today, April gold traded a more than $400/oz range in the span of about four hours. The volatility is unprecedented, and has undoubtedly affected overall money flows throughout the commodity space.
Corn Summary-
The corn market saw lower closes to end the week on Friday, though hardly due to fundamentals of its own as spill over selling from the macro world was the main source of the late-week pressure throughout the day. The bulls this week will have been disappointed in the fact that prices didn't react better to the ethanol headlines but like we talked about previously, a voluntary year-round E15 program doesn't do a lot of anything to materially alter corn demand in the short term. We've been saying it for months, but there is little on the horizon that could increase demand much if at all from where things are currently; ethanol production is estimated to be running at north of 90% of capacity, exports are at record levels, and feed use is likely overstated by a fairly sizeable margin. If the best demand outlook we've had in some time can't get ending stocks below 2.0 bil bu, what happens if demand levels back out? This is why we continue to beat the drum that a supply problem is needed to rally the market longer term.
Soybean Summary-
Soybeans shed premium throughout the complex for the second straight session to wrap up the week this week, as here too spill over selling from the macro markets was unavoidable and helped pressure the space during most of the day and into the close. The bottom line here is that there just hasn't been much new this week - the RVO announcement is now more likely to be seen in March than it was a week ago, but most still felt this was the most likely outcome; Brazil still has a massive crop that's going to be able to satisfy world demand probably for longer than normal; and there is no sign that relations between the US and China are any different than they were a week ago. Unless something changes on one of these fronts, we would anticipate rangebound trade in the weeks ahead, with the market likely to find selling near the $11 level and buying anywhere much below $10.50.
Wheat Summary-
More of the same for the wheat market on Friday, as like the other row crop markets, a lot of the day's price action was predicated on outside market momentum and money flows that didn't necessarily have a lot to do with the wheat market specifically. From a chat standpoint, spot Chicago futures were unable to push above the highs made yesterday, but were also unable to push below the lows, which led to the highest close on the March contract since the first week of December. For next week, key now will be whether the market can sustain trade above the 100-day moving average that it cleared this week, or if short covering has run its course and a slow resumption of the downtrend that has generally been in place since before the start of last year resumes next week.
Outside News Headlines-
Crude oil futures up $0.20+/bbl.
Weather Updates-
This weekend's Carolina snow storm looks to be about the only weather event of note for the next few days, with 3-5" possible across the bulk of the two states. Elsewhere, the Great Lakes region sees ongoing light snow, while he models have a more defined system impacting the northern Midwest then Sunday into Monday. Models then see a bigger, more defined system possible for the central Midwest Tuesday/Wednesday next week, though there isn't great agreement between the two on timing.
In the week two period, models again trended wetter this afternoon for the midsection of the country but have maintained drier biases in both the southeast and up the West Coast. On the temperature side, things continue to look about how they did the rest of the week this week, with high pressure in the west keeping things warm, while the east stays on the colder side. The EU today has warmer air further east than the GFS does, which will be what most across the Midwest are watching into next week.
Weekend rains across the bulk of Argentina look to be minimal, with models in good agreement on moisture staying to the west until the middle/end of the week next week, when better rains are expected to return. The GFS is warmer here into next week than the EU model is, but both see generally a cooler week in store than the one that was just had, aiding in the overall net improvements in weather between now and this time a week from now.
For Brazil, rains will be on the spotty side in the south/southwest, but look to continue falling regularly across the rest of the country's ag regions, as the models are in good agreement on normal moisture continuing for at least another week to 10 days. Temperatures are seen more near average here, with there being little to no concern over extreme heat. As has been the case most of the growing season, the forecast continues to be nearly ideal, and has produced early yield reports that are up some 5-10% from last year.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
