Roundup: Chicago agricultural commodities end mixed over the week

Chicago Board of Trade (CBOT) grains futures close mixed over the trade week which ended April 21, as the market lacks the spark needed to sustain short covering rallies.

CBOT corn futures ended lower and have surrendered the market's entire post World Agricultural Supply and Demand Estimates Report rally. The Central U.S. weather pattern through early May is still much too wet, and planting delays will mount across the Midwest.

Brazilian weather also remains favorable, and a substantial boost in soil moisture there is indicated just ahead of corn pollination in mid-May. Argentine harvest is expanding, albeit slowly, and South America still looks to take over world feed grain export market beginning in mid July. The overreaching market theme remains competition for world export share.

Yet, 2017 US corn production will drop some 1.1-1.3 billion bushels which makes the market vulnerable to short covering rallies.

Analysts hold that the sideways trading is most probable through the balance of spring. Thereafter, the arrival of summer volatility will produce at least brief rallies. The odds of weather scare rallies are higher in 2017 than 2016.

Spring wheat futures ended unchanged amid ongoing planting delays in the U.S. and Canada and a very likely tightening of the U.S. spring wheat balance sheet in 2017. Winter wheat futures, however, settled sharply lower.

Managed funds remain near record short in Chicago, are heavily short in Kansas City, but the market lacks the spark needed to sustain short covering rallies. Analysts are paying more attention to expanding dryness in Western Europe, but also recognizes favorable growing conditions across the U.S. Southern and Central Plains.

Argentine cash prices have also drifted lower, as have Aussie replacement values, and wheat remains a market in search of demand. Rising global corn inventories will also weigh on rallies, particularly amid highly elevated competition for summer feed demand worldwide. Yet with wheat prices at 10 year lows and cash prices in the U.S. pressed against loan levels in the Plains, this is no place to turn bearish.

Soybeans were on both sides of unchanged through the week before ending slightly lower for the week on Friday. A higher start on Monday quickly found sellers, while support was established below 9.40 dollars. The United States Department of Agriculture announced old crop soybean sales to China on Friday, which is a little surprising, given the record export pace out of Brazil. World soy demand remains record large.

National Agricultural Statistics Service will report initial planting progress on Monday, which is likely to be less than 5 percent of the total U.S. crop with significant work to be limited to the Delta states. Big U.S. soybean stocks and new crop acres have been fully digested and the market now looks to be waiting on the 2017/18 planting season and summer weather pattern.

The outlook into next year is bearish on record world supplies, but there likely will be a few strong weather rallies amid warm/dry Central U.S. weather. Endit