Today’s Prices
Grain prices finished mostly higher today as this week has been back and forth in a choppy trading patten.
Grain Market News
Weekly Ethanol Production
Our chart that shows weekly ethanol production shows we are down 4 weeks in a row with this week being the biggest decline down to 947,000 barrels a day the lowest going back to the Sept Oct time frame when corn stocks were tight and hard to find corn prior to harvest. In addition to this week numbers being disappointing and low it came in well below the level needed to reach USDA’s corn use for ethanol estimates. Weekly ethanol production as very disappointing.
Weekly Stocks of Fuel Ethanol
Stocks declined for the 3rd week in a row down to 24.33 million barrels. That is good news to see stocks declining and we expect a combination of lower production but also strong exports will allow stocks to continue to decline through late spring into the early summer.
Brazilian Soybean Exports
Soybean demand is very good, one of he reasons US soybean demand is good is that Brazilian soybean exports in February this year shown in red vs. last year shown in grey. February exports were very good because last year their harvest was delayed. This year they had an early harvest so they were able to ship in February. March exports did drop a little below the year ago level and based on current shipments and ship lineups Brazilian soybean exports expected to come in around 11 mmt, vs. 16 million a year ago. That decline is expected to continue seasonally. Brazil may very well have already seen its peak exports. When we combine Feb, March and April exports this year could be the lowest over the past 3 and discrepancy could get even larger as exports are likely to be consistently below the year ago level into next years harvest of Brazilian beans in the Jan, Fe March time frame a year from now.
Grain Market News
Snow Depth
In ND they had a blizzard last week and the dark blue areas shown with a red X stil have 10-20 inches of snow on the ground. This is not how much snow fell, this is how much snow is still on the ground. Most of ND into nw MN and southern Canadian prairies are going to have a slow start as it takes time to melt off this snow.
US Weather April 20
Todays weather shows cool temps in the far north 30s and 40s for temps at 1 this afternoon. Even in the ventral belt temps mostly in the 40s very cool for this time of year. In addition to the cool temps rai and snow have been falling across the north. Certainly not contusive for a rapid planting pace.
7 Day Observed Precipitation
The past 7 days we can see the precipitation in ND which primarily fell as snow then precipitation In the eastern and southern belt into the delta kept planting slow there as well. We are hearing of isolated planting taking place in ne IA, NW IA and in portions of NE, KS and down into the southern Plaines. Its not a lot of planting but at least a little planting is taking place in some areas that have missed out on recent rains.
US Rivers In Flood Stage
The combination of recent rains and snow melt is causing rivers to now enter flood stage in the red river valley of the north on the MN ND boarder. There is more rain expected over the weekend that will add to melting snow and therefore the flood problems could get worse in the far northern plains. In addition heavy rains in the central and southern belt could add to some flooding issues in southern IL down to the delta. Current locations showing rivers in flood stage at 64, we look for that number to go up after weekend rains.
7 Day Precipitation Forecast
Those rains we are talking about 1-2 inches in the far northern plains, again that will add to the problems not only the rain that will fall but also melting snow so a combination of melting snow and rainfall could exasperate flooding problems in the north plains specially ND and red river valley of the north while heavy rains from SE IA, IL down into the Delta region could cause additional problems there. We are hoping wheat farmers in the central and western plains could get some rain. Not a lot of rain is forecast but hoping some rain could develop over the weekend that would develop to help the wheat and planting conditions
6-10 and 8-14 Day Forecast
This map is not overly threatening but not ideal either. Generally out temps in the 6-10 day below normal 8-14 day below normal .That is somewhat concerning but we do have drier weather for most the belt so that is good news even if its cool. If we could get a week to 10 day fry spell it could allow planters to start rolling even if its below average.
July Corn Chart
Corn prices were firmer today but we did not take out the highs posted early yesterday at $8.14. That leaves the chart in somewhat of a mixed configuration. The chart is showing some signs of topping action but we had a fairly strong close today. In order to keep the uptrend in tact we would like to see corn making new highs at some point over the next few days. If we could not make new highs that might signal the next significant correction. We’ve had 3 significant corrections in the corn market since the Russian Ukraine war broke out. We need to keep prices rallying to new highs to prevent the correction from taking place. If we do not get friendly news a correction could take prices back down to the $7.60 tpe range about 50 cents below where we are now.
July Soybean Chart
Soybean prices continue to post new highs for this move. Up to $7.21. Not only are we breaking above our pennant formation which has been in place going back to early February. We made a new high today, took out the spike highs from late March with the next target the contract highs at $7.41. That is only 25 cents from todays close. The chart is still pointed up, technical are still up but we will note the technical indicators are now getting into the overbought range for the first time since February. There is no sign of topping action from either the chart or technical at least not yet.
July Wheat Chart
Wheat prices had a down day today, the chart looking a little toppy in the sort term. Technical indicators which started to hook yesterday showed a little more sign of hooking to the downside today. We have mixed signals from wheat as well. The overall trend is still an uptrend but the last day and a half have been disappointing from a short term perspective and the technical are looking concerning as well. Chart support comes in where the uptrend line lies around $11.25 with overhead resistance the contract highs at $12.59.
