Morning Comments/Roy's (RJ O'Brien)

Morning Grain Comments - April 29 2024

FND for May futures is tomorrow.  May longs need to be out by the close today to avoid delivery risk. 

CORN: Corn is mixed to slightly firmer this morning.  While US corn planting pace is expected to jump toward 28-32% complete, there will be little progress made this week after a wet weekend and another 3-4 rain systems expected the next 10 days across the Midwest.  Friday's CFTC report showed the funds covering shorts in corn, wheat, and the soy complex as we get into the US weather season.  Funds are still short over 230k contracts of corn.  FND is tomorrow with active spread trade expected today as longs not wanting to take delivery need to roll or exit by the close.  The EPA reportedly is to be out tomorrow or sometime this week with the modified GREET model.  Some chatter is will only address the 40B blending credit and not the 45Z production credit.  Wait and see.  Export news is quiet other than Algeria tenders for 160k tons of corn and 70k tons of soymeal, which will be sourced out of S. America.  July corn stuck in a $4.35-4.55 trading range. 

WHEAT: US Wheat is mixed this morning with KC wheat higher but Chicago and European wheat lower.  The weather maps show western 1/3rd of KS of continuing to miss the rains and looks to be dry the next 10 days.  US winter wheat ratings are expected to drop another 1-3 points in this afternoon's Crop ratings report.  US spring wheat planting progress expected to be 35-38% complete but wet conditions next the next 2 weeks will slow field work.  The weekend weather maps added moisture to the dry areas of southeast Russia wheat territories.  But the European weather maps this morning backing off the rain amounts.  These wheat areas do need to see some moisture in the next 2-3 weeks.  Russian wheat values holding steady as we approach the May Day holidays.  Russian/Ukraine war escalating with Russia making a big push/attack all along the front lines before US aid arrives and to show some victories for their May 9th holiday.  After the short covering rally last week look for increasing resistance at $6.65-6.75 in KWN. 

SOY-COMPLEX:  Soybeans and products are higher after Argentina's oilseed union call for a port strike starting to today and lasting 72 hours to protect the Argentine president's proposed policies in Congress.  This will hamper soymeal and soy oil exports for the next 3 days and should be supportive to US values.  US soybean planting progress tonight is expected to be in the 18-23% complete range with wet weather slowing progress this week across the Midwest.  Stratgie Grains is keeping their EU rapeseed crop estimate at 18.1 mmt or 9% below a year ago due to a drop in acres/plantings.  Sunflower production is expected to be 10.7 mmt, up over 10% from last year. Friday's CFTC report confirmed the fund are back long soymeal (almost 20k contracts), while cutting shorts in soybeans to less than 150k contracts and soy oil less than -50k contract short.  Expect increasing resistance in SN toward $12.00.