Corn: Slow Midwest planting won’t become a significant market concern unless it continues past the first week of May or so, and warmer, drier conditions expected over the next two weeks should allow for more fieldwork, according to World Weather Inc.
Traders will keep a close eye on the Russia/Ukraine war and the U.S. export pace. Disappointing weekly export sales may signal that $8.00 corn is curbing demand, though China continues to step in with purchases. Earlier today, USDA announced 1.347 MMT in old- and new-crop corn sales to China, bringing the country’s total purchases so far this month to nearly 3.5 MMT.
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Soybeans: Tight global vegetable oil supplies, combined with high crude oil prices and the Russia-Ukraine war, may keep the soy complex elevated for the near future. Indonesia today announced plans to ban palm oil exports starting April 28 to control soaring domestic prices. Indonesia is the world’s biggest exporter of palm oil. Whether China remains a top purchaser of U.S. soybeans will also be key to price direction. Weather may emerge as a bearish factor if soggy Midwest conditions persist past mid-May, potentially prompting farmers to shift corn acres to soybeans.
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Wheat: Weekly export sales of U.S. wheat were dismal in the latest reporting week. Sales plunged to just 26,300 MT for 2021-22, down 73% from the previous week, down 79% from the four-week average and a marketing-year low. U.S. wheat export commitments are running 24% behind a year-ago, which is a bit more than USDA has projected. If U.S. wheat futures prices are to remain at their still-elevated levels U.S. export sales numbers need to improve and do so quickly.
World Weather today said warm to hot temperatures, limited rainfall and windy conditions next week will also enhance drying rates, keeping drought in place across the region. HRW futures are outperforming SRW recently due to poor crop conditions in the U.S. Plains. Drought persists in the central and southern U.S. Plains. Western HRW region conditions are rated poorly and concern remains high over the potential for notable declines in yield this year because of dryness, said the forecaster.
Cotton: Export demand may be problematic for the cotton market in coming weeks, especially given the sharp slowdown in export sales. While relatively slow shipments may simply push previous commitments into the new crop year, they may end up undercutting the price outlook as well. This seems even more likely if recent talk of a global recession proves accurate, especially if broad inflation remains a major issue. Sustained U.S. dollar strength would also tend to weigh on the market.
