Written Commentary
CORN
Trading was quiet today as prices closed with gains of less than $.01 bu. For the first time in a week Mch-24 didn’t carve out a new contract low today. First resistance for Mch-24 is at last week’s high of $4.45 ½ with support at yesterday’s contract low at $4.27 ¾. Prices backpedaled from early strength as the US $$$ index shot up to a 3 month highs following a hotter than expected CPI report. Consumer prices rose .3% in Jan-24, vs. expectations for only a .2% increase. YOY inflation rose 3.1% vs. the average est. of a 2.9% rise however down from 3.4% in Dec-23. YOY core inflation was up 3.9% against expectations for a 3.7% increase. Dr. Michael Cordonnier lowered his Brazilian production forecast 3 mmt to 112 mmt, and his Argentine forecast by 2 mmt to 54 mmt. Over time SA production estimates should come together a bit but probably not for at least a few months. Stocks/use among the 4 largest exporters is expected to rise to a 5 year high at 11.6% using the USDA production and usage forecasts. Algeria is seeking 160k mt of SA feed corn for March shipment in a tender that closes tomorrow. Egypt reported bought 120k mt of Ukrainian corn for $220.25/mt CF for LH March and early April shipment. Freight costs were believed to be $28.25 mt. Egypt’s purchase volume was double the initial amount tendered for. South Korea feed buyers have also been actively buying feed corn from SA or South African origin for June shipment in privately negotiated deals .
SOYBEANS
The soybean complex was mixed with beans $.04 – $.07 lower, meal was down $3 – $4, while oil was up 30 – 40. Mch-24 soybeans seem stuck between $11.80 – $12.05. Longer term support at $11.45, with resistance at $12.47 ½. Resistance for Mch-24 oil is at the 50 day MA, currently 48.29. Support for Mch-24 meal at LW’s low of $341. Spot board crush margins increased $.02 today to $.92 ½ bu. Bean oil PV increased to 40.7%, a 4 month high. South American weather is mostly favorable. Timely rains have brought some relief across Southern growing areas of Brazil. The next round of heavy rains are expected across northern growing areas of Brazil late this week into the weekend. Delays with soybean harvest and 2nd crop corn plantings are likely to occur. Although Argentina will experience net drying for the next week to 10 days, given the recent rains and relief from the intense heat, production prospects should remain strong. Follow up rains in late Feb into early March will be needed however. Dr. Michael Cordonnier lowered both his Brazilian and Argentine production forecasts by 2 mmt to 147 and 50 mmt’s respectively.
WHEAT
Prices were lower across all 3 classes today with Chicago steady to $.03 lower, KC was down $.03 – $.05, while MGEX was $.07 – $.11 lower. The 100 day MA at $6.02 ½ has pretty much put a lid on rally attempts for Mch-24 Chicago the past few sessions. Support is at last week’s low at $5.83 ¾. New 4 week lows for Mch-24 KC with next support at the contract low at $5.86 ¾. New contract lows for MGEX futures. A South Korean feed group has reportedly bought 60k mt of optional origin feed wheat for $255/mt CF. Jordan has reportedly bought 60k mt of optional origin milling wheat for $253/mt CF for first half of May shipment. Japan’s Ag. Ministry is seeking 115k mt of US, Australian, and Canadian wheat in a regular tender that closes this Thursday.
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