MarketEdge PM Comments
Apr 06, 2023
(Mike Moellenbeck)
Another day with the markets selling off. Corn was down 1-9 cents, the nearby months getting hit the hardest. Same story with beans with old crop down12-18 cents and new crop down 5-6 cents. The markets felt hesitant about making any jump in prices ahead of a 3-day weekend; especially when there really was any supportive news to drive prices higher today.
- Brazil's bean basis has dropped 10-15 cents. Brazil producers are marketing their crop and the market is reacting.
- Next Tuesday USDA will release the April Supply/Demand Report. The trade is looking for a larger Brazil bean crop at 153.7 million metric tons (up 7 mmt from March) and a smaller Argentina crop of 29.3 mmt (down 3.7 mmt from March). Argentina's crop currently rated only 4% good/excellent.
- The trade expects the US corn carry out to be unchanged from last month at 1.342 billion bushels. This estimate is despite the lag in the corn export sales. China has certainly been more active in recent weeks booking US corn. China is now only 4 million metric tons (160 million bushels) behind last year. Expectations are that deficit will continue to decline.
- Ethanol production margins have improved sharply over the past few weeks. Production levels have been flat, and stocks have been declining lending improvements to crush margins from $0.37 cents to the current $0.70 cents since mid-February. Ethanol stocks tend to drop this time of year and continues to do so through the spring downtime window which is coming up. The improve margin structure should incentivize plants to run at maximum rates.
- The markets are closed tomorrow in observance of Good Friday.