We kicked off the day with Export Sales, GDPO Growth Rate QoQ Final, Corporate Profits QoQ, GDP Price Index QoQ Final, Goods Trade Balance Adv, Initial Jobless Claims, Retail Inventories Ex Autos MoM Adv, Wholesales Inventories MoM Adv, Continuing Jobless Claims, Core PCE Prices QoQ Final, GDP Sales QoQ Final, Jobless Claims 4-Week Average, PCE Prices QoQ Final, and Real Consumer Spending QoQ Final at 7:30 A.M., Pending Home Sales MoM & YoY at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., Kansas Fed Composite Index and Kansas Fed Manufacturing Index at 10:00 A.m., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15- Year & 30-Year Mortgage Rate at 11:00 A.M., 7-Year Note Auction at 12:00 P.M., and Hogs & Pigs at 2:00 P.M., Fed Barkin Speech and US Balance Sheet at 3:30 P.M.

Photo by Waldemar on Unsplash

The Mortgage Bankers Association reported that the average contract interest rate for 30-year fixed-rate mortgages loans under $766,550 were fractionally lower last week at 6.71%. Compared to a year ago, this was 0.22% less which marked the 6^th consecutive week that rates have been stuck between 6% and 7% over the previous two years, which is depressing home demand. The Mortgage Application Index reached a 6-month high at the start of the month but has declined for the last 2 weeks and was down 2.1% last week. Overall mortgage demand remains at levels not seen since the mid-1`990’s. The Home Refinance Index remains just above record lows, while the Mortgage Purchase Index is near record lows since the Index’s inception in 2004.

US Weather Pattern Update

Midwest/Delta Forecast Outright Wet in 6-14 Day Period:

The Central US forecast offers needed rainfall to much of Nebraska this weekend, and has trended wetter in the Delta/Southeast & Eastern Midwest. Showers impact this region every 2-3 days from March 28 to April 10. Confidence in 11-15 day details is low, but an easing or a complete elimination of drought in WI, IL, IN, and MI is probable. The EU ensemble model’s two week precipitation forecast, totals of 4-6” favor MS, TN, and the Ohio River Valley. Heavy Midwest/Delta rainfall in late March/early April is viewed as beneficial as drought currently covers 53%of the corn planting area and 42% of the soybean area. Corn planting in TN and KY usually begins in early April, and seeding progress reporting in IL in the first half of the month. It’s too early for concern, and regular rainfall should significantly increase moisture in the Southern Midwest soils.

Corn Comments & Analysis

July CBOT Corn Falls to 200-Day Moving Average; Larger Seedings Priced In; US Corn Competitive Though Late Summer:

Long liquidation persists ahead of USDA stocks & seedings data, but Ag Resources (ARC) cautions against turning bearish of corn below $4.45 basis May futures. Larger US seedings are priced in, and attention after March 31^st turns to US planting dates and the intensity of Brazil’s monsoon – which long range guidance projects to wane beyond the next 10 days. The US market is working to keep annual consumption of 15 Bil Bu in crop year 25/26. Today, there’s just not much competition for US corn. US corn remains the world’s cheapest feed grain for nearby shipment and forward Brazilian market is working to keep supplies within the country. US Gulf corn for July arrival is priced at parity with Argentine origin and sits $.23/Bu below Brazilian. In years of large Brazilian surpluses, corn is offered aggressively for late summer arrival. Such is not the case this year. A range of $4.40-$4.85 spot and $4.35-$4.70 , December is forecast nearby. New sales await recoveries. The size of 2025 US corn seeding will determine the size of the early break. Key chart support rests at $4.45-$4.50 May.

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