Rice closed a little lower in consolidation trading.
Profit taking Monday diminished the wet weather forecasts that provided support to our wheat markets for most of the trading session. All areas in the HRW and SRW regions saw 0.20 - 2.00 inches over the weekend. Eastern Oklahoma saw up to 3 inches. The extended forecast shows below normal temperatures and above normal precipitation.
A rather impressive day was had in the beans on Monday as they managed to shake off bearish inspections and crush numbers and close in the green.
As the old saying goes “Rising tides lift all boats” and we say that yesterday as the run-up in corn and wheat pulled the bean complex higher. Heavy rain and snow totals were the fuel for the rally. It is estimated that 10% of the bean crop had been planted, the question now is how many of these acres will have to be replanted. The good news for producers is there is plenty of time yet to get the crop in. We might even pick up acres if the weather doesn’t break fast as it will potentially force some corn acres into beans.
As we prepare for the month of May, it appears that the relative calm that we have enjoyed is about to end. We might even describe the last four months as ones of extreme calm. For soybeans, we had the narrowest January through April trading range since 2001; and for corn, it was the narrowest range since 2006. In fact, corn, wheat, soybeans and soy products all ended April within 1.5% of where they closed the month of March.
A weather issue in the grains could cause them to cover their short bet in corn and wheat. They have helped the cattle complex rally $12.00 in the past seven sessions.
OPEC is committed to extending production cuts as the global oil market continues to see inventories fall. While the U.S. oil rig count rose, it plummeted in Canada offsetting the gains. This comes after Morgan Stanley reports that crude stockpiles are, "less visible, as supply in Asia and in floating storage have fallen by 72 million barrels this year."
We believe corn futures will steadily decline to the low $3.40's.
The International Grains Council said Thursday it expects global grain production to top 2.1 billion metric tons for the first time as it raised its production forecast amid favorable weather.