Written Commentary
CORN
Prices rebounded late to close $.02 – $.03 higher. May-24 did trade below yesterday’s low before recovering. Initial resistance is at Monday’s high of $4.33 ½. A Bloomberg survey of US corn ending stock estimates suggest a drop of 17 mil. to 2.155 bil. Little change expected for Argentine production which was 55 mmt in Feb-24. Brazilian production is expected to drop 2 mmt to 122 mmt, I look for no change this month. Ethanol production last week at 1,057 tbd was down from 1,078 tbd the previous week, however up 4.7% from YA. Production was in line with expectations and above the pace needed to reach the USDA corn usage forecast. There was 106 mil. bu. of corn used in the production process, or 15.13 mbd, above the 14.6 mbd needed to reach the current USDA forecast. Implied gasoline usage jumped 6.4% to 9.013 mbd, a calendar year high and was up 5.3% from same week YA. Export sales tomorrow are expected to range between 35 – 55 mil. bu. Brazil’s Trade Ministry reports corn exports at 1.713 mmt in Feb-24, down 25% YOY. Prices have stopped the bleeding to the downside for now however so far haven’t been able to generate much traction to the upside. Time will tell if USDA on Friday or Conab production estimates early next week can change that.
SOYBEANS
The soybean complex was mixed with beans steady to $.03 lower, meal was mixed with bull spreading noted, while oil was 25 – 30 higher. Little to no change for forecasts in South America as conditions remain favorable. A vegetable oil conference in SE Asia seems to be suggesting a low for global vegetable oil prices may be near ?? One analyst noted that global demand will increase 6 mmt in 2024 while production is expected to jump only 3 mmt. Palm oil production in Indonesia (world’s largest producer and exporter) is expected to rise 2.3% in 2024 to 54.4 mmt, however exports are expected to drop 2.5% to 29.5 mmt. Domestic usage is forecast to jump as blend rates for biodiesel production are expected to increase from 35% to 40% later this year. Surveyed estimates show very little change is expected for US soybean stocks on Friday. Little change expected for Argentine production, vs. the USDA est. of 50 mmt in Feb-24. Brazil’s Trade Ministry reports bean exports at 6.61 mmt in Feb-24, up 32% YOY and a record high for the month. Export sales tomorrow are expected to range from 8 – 18 mil. bu. for beans, 165 – 550k mt meal, and -5 – 15k mt soybean oil.
WHEAT
Prices were lower across all 3 classes today with Chicago and KC down $.12 – $.20, while MGEX was $.10 lower. New contract lows for spot Chicago and KC. Next support for Chicago is the Dec-23 low on the weekly chart at $5.27 ½. Cancellations of US SRW wheat sales to China have also been rumored, however not yet confirmed. Russian drone attacks on port infrastructure in Odesa overnight that killed 5 has done little to alter the bearish sentiment. FOB offers for wheat out of the Black Sea have dropped to nearly $190/mt FOB with offers from Russia just below $200/mt. Algeria reportedly bought between 870 – 900k mt of milling wheat between $227 – $228/mt CF, likely sourced from the Black Sea region. Outstanding sales of SRW wheat to China/unknown are likely just under 60 mil. bu Egypt’s GASC this afternoon announced a tender for early May shipment of wheat that closes tomorrow. US export sales tomorrow are expected to range from 10 – 20 mil. bu.
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