Written Commentary
CORN
Prices were down $.02 – $.03 today in 2 sided trade. The 50 day MA put a lid on this week’s rally attempt in Mch-24 futures. The next resistance is the 100 day MA at $5.01 ¼. Support is at the Nov-23 low at $4.70. US corn stocks were cut 25 mil. as a result of higher exports. Stocks at 2.131 bil. were slightly below expectations. Global stocks were basically unchanged at 315.2 mmt, roughly 2 mmt above expectations. The USDA left both Brazil and Argentine production unchanged at 129 and 55 mmt respectively. They increased production in Ukraine and Russia by 1 mmt each, while lowering production in Mexico by 1 mmt. Ukrainian exports rose 1 mmt to 21 mmt. No changes to China’s import forecast at 277 mmt.
SOYBEANS
Beans were down $.05 – $.08, meal was $1 – $2 lower, while oil was 80 – 100 lower. Jan-24 beans stalled out after briefly trading above its 50 day MA resistance at $13.25 ¼. There were no changes to the 2023/24 soybean balance sheet leaving ending stocks at 245 mil. bu. We expected stocks to be left unchanged however felt we may see some shifting from exports to crush. In the old crop 2022/23 balance sheet we saw soybean oil usage for biofuels increase 91 mil. lbs. to 12.491 bil. which was offset by other domestic consumption. We still feel the new crop BO usage for biofuels at only 12.80 bil. lbs. will prove to be 1 bil. lbs. too low. Global stocks were near unchanged at 114.2 mmt, roughly 1.5 mmt above expectations. The USDA did lower the Brazil crop by 2 mmt to 161 mmt, however this was offset by a 2 mmt increase to last year’s crop to 160 mmt. They also raised Brazil’s export forecast 2 mmt to a record 99.5 mmt. The USDA kept the Argentine crop unchanged at 48 mmt. Chinese imports rose 2 mmt to 102 mmt. US stocks remain tight at 245 mil. bu. however could loosen a bit on lower exports if Brazil/Argentina/Paraguay can combine to produce a crop near the current USDA projection of 219 mmt. Last year the 3 SA countries produced a combined 194 mmt of soybeans.
WHEAT
Prices are down $.06 – $.111 across all 3 classes today. Mch-24 Chicago streak of consecutive higher closes ended at 8 sessions. US ending stocks fell 25 mil. bu. as a result of higher exports. SRW wheat exports were increased by 30 mil. bu. to reflect the recent Chinese purchases, while white wheat exports were trimmed 5 mil. bu. US stocks at 659 mil. bu. are still up from 582 mil. in 2022/23. While SRW wheat endings stocks dropped to 118 mil. bu. they remain the highest in 5 years. World stocks slipped .5 mmt to 258.2 mmt, slightly below expectations. Production in Canada and Australia both rose 1 mmt, while production was cut 1 mmt in Brazil.
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