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Today was quiet in the markets. Lately I have been getting asked... so are we going to move from here? We have been in these ranges on all commodities for old crop since the end of February. We have new headlines here and there that are giving us peaks and troughs, but we are staying pretty tight regardless.
My viewpoint, is that with the S&D's showing pretty ample supply coming into this growing season, coupled with a general idea on planted acres for this coming season, there is not much wiggle room on the outcomes that we could see. USDA's March 28 planting intention report provided us the planted acreage estimates that it will use in its first 2024-25 balance sheets when they are released on May 10, assuming that no compelling reason arises to change them - such as unusual weather. It also provided its trend yield estimate at its February USDA Outlook Forum. As such, we can largely complete the supply side of our balance sheets for that May report. A 5% below trend yield alternative could create an interesting scenario, especially if we see Brazil's crop fall short. Otherwise, it appears that we will be amply supplied with corn.
Don't get me wrong, there are factors that could drastically shake the carryout outcomes up: 1 being China coming back to the table with more commodity demand, and 2 being a weather/production issue this growing season. The headlines we have received as of late on export sales, ethanol demand, crush demand, etc., are all important pieces of the puzzle, but they overall have been running fairly as expected (no significant deviations). Positive headlines are giving us small blips of selling opportunity, but without this larger underlying story, we are struggling to develop momentum to continue to push forward.
What does that mean for you? If you have no grain marketed, consider selling some on a blip higher. Don't watch the markets often? Utilize GPO's to watch the market for you. We still have upside potential, but a 5% above trendline yield would exasperate the already flush supply situation. Taking some of the risk off of the table might be a good step for your marketing plan. Bailey highlighted an interesting stat at our grower meeting. The April 15 - June 15 Average was higher than the October 1st price in 13 out of the last 17 years. Today is April 4, we are knocking on this window's door. Things will be busy with outdoor work before you know it. Make a plan now. As always, if you'd like to talk through strategies for marketing, please feel free to reach out to Floyd or myself.
As noted in the midday, today's export sales report was... bad. The U.S. sold just 7.1 million bushels of soybeans (below already-pessimistic expectations) and the lowest total in five weeks. Cumulative 2023/24 soybean sales stand at 1.490 billion bushels, now 338 mbu behind last year’s pace, with the USDA looking for just a 272-mbu entire-year bean export deficit. Seasonally, that’s 5% behind the pace needed to hit that current USDA mark. On top of that, corn sales were at the lower end of expectations, and wheat sales were near 0 for old crop, but decent for new crop. This morning, private exporters reported the following sales activity: Sales of 152,404 metric tons of soybeans for delivery to Mexico during the 2023/2024 marketing year. This will be included in next week's numbers.
In yesterday's FED meeting comments, Federal Reserve Chair Jerome Powell emphasized the task of reducing inflation is ongoing and the central bank requires more assurance of easing price pressures before considering interest rate cuts. But he also reaffirmed the Fed’s intention to cut interest rates this year.
Funds were thought to have been mixed with beans a seller and corn and wheat buyers.
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