CONAB and WASDE data at odds.

After a second day of strength on Tuesday for the grain trade, midweek Wednesday brings about a softening and profit-taking. Yesterday, May soy oil was able to close above the 50-day moving average for the first time since mid-September 2023. Meanwhile, May corn futures are just under the 50-day MA, which is presently 4.47. May soybeans have a 50-day moving average resistance at 12.03. Closes for spot summer row crops above those values will encourage further technical buying on the charts ahead of the growing season, which has many unknowns.

There is a lot of debate and scrutiny now regarding the large difference in Brazilian corn and soybean crop estimates between the USDA and CONAB. Monitoring will now be the big input, as the NASS will start releasing winter wheat crop ratings and spring planting progress reports on April 1. The weather forecast for northern and central Brazil is hot and dry over the next ten days. North Africa is experiencing drought.

The Ukraine Grain Union indicated that for 2024, the total crop harvest is forecasted to fall to 76.1 MMTs from 82.1 MMTs last year and 107 MMTs before the war in 2021 due to sliding profit margins. Upcoming Ukraine corn exports are forecasted at 20.5 MMTs, with wheat at 13 MMTs, while rapeseed and other minor oilseeds will be around 3.6 MMTs. Negative margins on the high cost of war are hurting Ukrainian grain farmers along with the sliding international grain prices. Dryness is raising seed germination, and the spring planting campaign is currently starting with many farmworkers being conscripted into the military.

The South American forecast shows below-normal rainfall across Northern and Central Brazil for the next 10-14 days. The risks keep growing for an early withdrawal of the monsoon, producing drought worry for the Brazilian winter corn crop. A high-pressure Ridge across Paraguay expands into N Brazil on the weekend with widespread mid to upper-90s heat. Meanwhile, heavy rain will hit the soybean harvest of Southern Brazil and N and E Argentina with totals of 3-6.50”, which will spark flooding.

Live and feeder cattle futures closed higher Tuesday with a steady outlook offered this morning. April live cattle have been range-bound now for a month after last Friday’s false breakout. Still, the market is slowly trending higher will with narrow ranges. Feeder cattle also have been range-bound, with the recent trend leaning slightly lower due to a lift in corn prices. The outlook this week is steady, though beef prices continue to rise. On Tuesday, Choice picked up $1.71 for $310.59 while Select gained $0.72 to $299.60. The basis is narrowing as the cash market is advancing towards April's futures, but momentum at the CME has obviously stalled.