Fundamentally soybeans remain bullish and prices will continue to be volatile on weather concerns and fund trading.
WHEAT futures in Chicago (CBOT) closed up on Monday. The MAY’11 wheat contract closed at $8.260/bu; up 26.5¢/bu and 48.5¢/bu higher than last report. JULY’11 futures finished up 26.5¢/bu at $8.612/bu and 50.75¢/bu over last week. Floor sources said traders are worried about expanding wheat damage due to dry conditions in the wheat belt causing crop losses. Conditions look too wet in the north U.S. Plains and Canada increasing worries that producers won’t plant as much wheat as previously stated intentions. Additionally, severe weather conditions in the Northern Hemisphere are adding to price volatility. Exports were not supportive due to the high price of U.S. wheat. USDA put wheat-inspected-for-export at 28.017 mi bu vs. expectations for 30-32 mi bu. Iraq bought 300,000 tonnes (11.0 mi bu) of U.S. and Australian origin wheat in a tender issued two weeks ago. Government stocks in India fell by 35% from a year earlier since beginning purchases March 15. Supplies are shrinking due to a delay in crop harvesting in the northern grain growing regions. Funds were net buyers of 4,000 wheat contracts. Weather markets are contributing to price fluctuations.
DAIRY CLASS III futures on the Chicago Mercantile Exchange (CME) closed up on Monday with the exception of the May 2011 contract. The APR’11DA contract finished at $16.80/cwt; even with Friday’s close but $0.06/cwt higher than last week at this time. JULY’11DA futures finished at $17.40/cwt; even with Friday’s close but $0.10/cwt over last report. Cool wet weather in the Northeast region slowed field work activities and limited milk production increases. Demand was off increasing milk supplies due to the Easter holiday and many school closings for spring break. Warm weather in the Mid-Atlantic is seeing an increase in milk production due to greening pastures. Milk production in the Southeast is rapidly approaching peak level. Producers are showing more culling activity due to higher feed costs as supplemental hay feeding continues in most areas except the Southeast where pastures are coming flush. Cream demand has declined on slowing ice cream and cream cheese production while demand is steady-to-firm for bottle cream in metropolitan areas. Go Starbucks. USDA put milk production for the 23 surveyed states as of March 2011 at 15.8 bi lbs; up 2.4% from a year ago ahead of spring flush. Dairy producers are turning over herds more than ever. The first three months show 780,000 head went to slaughter, up 9.7% from 2010 and the most since 1997 according to USDA. However, cow numbers still increased 34,000 head during the January-March 2011 period. Western milk production is higher on new crop alfalfa and green chop feeding supplies. Processors report running at capacity. Increased butter and powder production is taking care of the spike in supply. Enthusiasm for higher milk prices continues to be dulled by growing feed and energy costs. Higher energy costs are also seen as the culprit for higher input costs across the board. Milk prices are generally reacting lower in advance of increased supply. CWT accepted 9 bids for export assistance for 2.152 mi lbs of cheese for delivery from now through October 2011.