North Gower Grains

Monday was a mixed day for our markets.  Spot corn closed down 3/4, spot soybeans closed down 13 1/2, harvest winter wheat closed up 10 1/2 and harvest spring wheat closed up 12.  In the overnight trade all of our markets are on the positive side.  Oil closed up $2.51 yesterday at $99.08 per barrel.  It is weaker in trading this morning with it now trading at $97.44 per barrel.  Our dollar started out yesterday morning at $0.722 US and has trended higher since then.  This morning it is currently valued at $0.727 US.

News on the war today has reports that talks will resume between Iran and the US later this week to end the war.  It also seems that US started their blockade of the Strait of Hormuz yesterday as they try to control what Iran can ship and/or control in the Strait. Net result this morning is that crude oil prices are pulling back from trading day highs made yesterday at around $104 per barrel.

With the US taking control of the Strait of Hormuz this hurt soybean prices yesterday.  Remember that China was the main purchaser of crude oil out of Iran and with the US now blocking these shipments there is concern that this will hurt US / China relations.  Of course a main trade factor between the two countries is soybeans and if the relationship is weakened fears that soybean sales from the US to China would decrease was brought forward.

The corn market has traded negative for 5 straight days and has only traded positive once so far in April.  With the market now trading below all of the 20, 50 and 100 day moving averages this market is looking for a reason to go positive.  The high price of crude oil does not seem to be supporting this market even with it supporting the price of corn based ethanol in the US.  Large stock numbers in the US keep getting mentioned as a reason for prices to weaken.

The USDA released their Weekly Crop Progress Report yesterday.  Corn plantings are reported at 5% complete.  This is up from 3% last week and is just ahead of the 5 year average of 4% planted for this time of the year.  For soybeans it is reported that they are 6% planted.  This is well ahead of the 5 year average of 2% planted.  Spring wheat plantings have reached 6% completed.  This is just behind the 5 year average of 7% planted.

The biggest news in the report was the good to excellent rating for their winter wheat crop is only at 34%.  This was down 1% from last week and is far behind the 47% good to excellent rating at this time last year.  Much of the HRW wheat growing regions remain under drought like conditions and as such it is hard to think that this crop is going to get much better at least in the short term.  How much support this will bring to the markets is yet to be seen as strong world wheat stocks will keep a lid on prices.