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Limit Up

By Tori Uhland

April 5, 2024

This is the time of year when things can really change quickly. We are in the middle of planting season in the United States (at least in the south, while those farther north are preparing), South America is in the middle of harvest, spring and summer weather implications, and lots of government report data. This year is shaping up to be another interesting one.

Speaking of data, the USDA released the Quarterly Stocks and Prospective Plantings reports on March 28th and will release the April WASDE on April 11th. The upcoming WASDE could include notable revisions to the United States corn balance sheet, particularly in the ethanol usage and feed/residual usage estimates, bringing both numbers up. April isn’t historically a month that I would consider one of the “major” report dates, but the USDA has been known to throw in a surprise or two before. One possibility is lowering the US corn ending stocks, but it may not happen this month. That would be bullish for corn, though it will still be a very large carryout. On the other hand, changes to look for at some point down the line include lowering the US soybean export projection as well as the feed/residual use estimate for wheat. The 2024-25 new crop projection estimate won’t be released until the May WASDE report.

There have been a few noteworthy items in the headlines lately. Avian Influenza has been found in dairy cattle across the country. Fortunately, pasteurization kills the influenza so there isn’t a risk from any milk. Unfortunately, it does lower milk production and feed consumption while the cattle are sick. There are lingering worries that have kept pressure on cattle prices. The sickness does not bode well for feed demand, nor does the recent announcement that the bird flu has also been found in the flock at a farm in Texas owned by one of the largest US egg producers. At the time of this writing, nearly 4 percent of the birds at that location have been culled.

There have been a few international headlines as well, including escalations in the Russia/Ukraine war. It has also been reported that the Chinese government has unofficially requested some grain traders to limit or slow imported corn delivered due to high domestic stocks, which are negatively impacting domestic prices ahead of the planting season.

Meanwhile, India is asking private traders (Cargill, Louis Dreyfus, etc.) not to purchase wheat from their farmers during the month of April to allow the government-backed Food Corporation of India to buy first and replenish their reserves.

The USDA also published their first Crop Progress report of the 2024 growing season. As of March 31, 2 percent of anticipated corn acres have been planted, with Texas showing 57 percent complete. The Midwest has a nice planting window over the next few weeks. Early planting of corn generally means a better chance of more planted acres. About 4 percent of winter wheat crops have begun heading as of March 31, primarily in the southern states. This is about 2 percent ahead of the 5 year average. Soil moisture replenishment has been happening over much of the Midwest and the area under drought is shrinking.