We kicked off the week with NAHB HousingMarket Index at 9:00 A.M., Export Inspections at 10:00 A.M., 3-Momth & 6-Momth Bill Auction at 10:30 A.M.

The Commitment of Traders Report confirmed a week of fund buying across the principal ag markets. Funds bought 40,900 contracts of corn, 29,000 of bean oil contracts, and 16,900 contracts of soybeans. Funds sold 13,300 of wheat in Chicago but bought 5,300 in Kansas City and 2,400 in Minneapolis. Funds sold 1,400 contracts of soybean meal and remained short in all CBOT markets. Funds sold 1,400 contracts in hogs, 1200 in feeder cattle and bought 3,900 in live cattle. Funds were net long in the 3 CME livestock markets. Across the 10 principal ag markets, funds bought 81,200 contracts, reducing their net short to it’s lowest level since January. While in Friday’s action open interest fell 22,488 in corn, while rising 9,887 contracts in soybeans and 3,204 contracts in wheat. Soybean oil open interest gained 2,014 contracts on the strong rally with soybean meal up 5,394 for the day.

Photo by Waldemar on Unsplash

After digesting the fund and new money outside activity, another key to the marketplace, especially the beef market, pressed by the devastating wildfires in Texas & Oklahoma. The economic impact will be felt locally and countrywide with the latest estimate that 7,000 head of cattle was killed. This adds and piles on to another industry whose herds are the lowest since the 1950’s. After attacks on the Cattle Industry this is an Act of God that will further inflate impacting prices and what we can afford to eat at the table. This should make Friday’s Cattle on Feed more interesting, if the actual numbers or a close guesstimate is seen in the data, watch for continued fund activity.

South American weather update has welcome rain impacting Northern Brazil March 23-28 while flooding remains a concern in Southern Brazil. The EU & GFS models remain in agreement with respect to expansion of rainfall into Mato Grosso, Goias, and Minas Gervais in the 8-15 day period, which keeps soil moisture adequate for early safrinha corn growth. Mato Grosso do Sul and Parana will be left short changed and April climate guidance maintains a pattern of widespread dryness and potential for searing heat in Central Brazil, The near-term outlook in C/N Brazil is less threatening this week, but it’s April/early May weather that’s most important. Rio Grande do Sul in far Southern Brazil in the last two weeks has been recorded in a range of 3.4-6.6”. Ag Resources (ARC) also notes their soybean harvest typically begins in early April, and a drier pattern is desired to prevent yield/quality loss. RGDS is projected to account for 15% of total Brazilian soy production over 20 MMT’s of supply.

This morning’s takes are, with CBOT futures opened the week higher, the soy complex sagging in the early Monday morning trade. The Brazil fob paper market is in retreat due to advancing harvest and willingness of Brazilian farmers to sell newly harvested crop on the CBOT rally. This is pressuring CBOT soy futures on hedge related selling, while the wheat market gains on rising Black Sea fob prices offers and the record wheat loadout program that is underlying corn is caught, but doubtful it can score above last weeks $4.45 as needed rain drops across Northern Brazil. Look for back and forth trade in today’s trading session.

More By This Author:

Row Crops & Day Of Reckoning. The Corn & Ethanol Report
Texas Oklahoma Wildfires Rage On. The Corn & Ethanol Report
Focus Brazilian Weather & Prospective Plantings. The Corn & Ethanol Report