Grain markets ended higher on April 15 as worries about conflict in Iran lessened, allowing traders to turn their attention back to crop fundamentals. Livestock prices were mostly lower, with cattle correcting after recent highs.
The shift in market sentiment is significant for farmers and traders who have been closely watching global events that could impact supply chains. The easing of geopolitical fears has allowed weather forecasts and planting progress to become the main focus for grain markets.
Rich Nelson of Allendale said that although he does not agree with it, the corn market was adding a weather premium due to concerns about planting delays. “This forecast does have above normal rain still lined up for the next two weeks. So we’re going to finish out April with a good replenishing moisture situation, but we’re not going to be advanced as far as planting. Let’s make that argument here,” Nelson said. He also noted confidence that U.S. Department of Agriculture will reduce corn acreage estimates again this season: “They were 3.5 million acres lower on that March survey. Our own survey suggested 5.1 million acres lower.” However, he added, “I personally am not changing yield arguments here just yet.”
Corn prices found support from export demand after falling toward the bottom of their range, with Mexico and unknown destinations making purchases according to Nelson’s comments in the report.
Soybeans rebounded following optimism over an upcoming mid-May meeting involving China and strong processing data: “I would certainly say that that NOPA crush report for March, 16% over last year…is still a strong NOPA crush,” Nelson said. While there is some hope China might increase purchases at the summit, he added: “I give maybe a 10% chance at some small corn wheat buys…I’m not really on board with the idea that they’re going to buy soybeans here.” Price competition from Brazil remains a challenge for U.S exports.
Wheat closed higher after recovering from early losses tied to rain forecasts; technical factors are now in play: “Seasonally…typically there is a short-term rally…But typically this is not a long lasting rally,” Nelson explained.
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