Written Commentary
CORN
Prices were up $.08 – $.10 today with several contracts closing on their highs. May-24 jumped to a 3 week high with next resistance at the 50 day MA at $4.51. No significant change in market fundamentals suggests much of the bearish news may be discounted. Speculative short covering is perhaps signaling risk/reward is shifting in favor of higher prices. Little to no change for forecasts in SA as conditions remain mostly favorable. Export sales at 44 mil. bu. were in line with expectations. YTD commitments at 1.544 bil. bu. are up 28% from YA, vs. the USDA forecast up 26%. Census exports in Jan-24 at 169 mil. bu. were down 10.5% from Dec-23 however up 36% from Jan-23. In the first 5 months of the 23/24 MY corn exports are up 33% from YA and running 97 mil. bu. over the inspection pace. Algeria has reportedly purchased corn from SA origin between $228 – $230/mt CF. Final volume is unclear however the tender was for 120k mt. Mexico is reportedly waiting for the US to provide proof that genetically modified corn is safe for humans in the ongoing dispute over their plans to ban the import of GMO corn for human consumption.
SOYBEANS
The soybean complex was higher across the board with most contracts closing at or near their highs. Bean finished up $.12 – $.18, meal was $3 – $4 higher while oil is up 90 – 105. May-24 beans closed into new highs for the week with not much resistance until $11.92. Resistance for May-24 meal is at $337.50. May-24 oil has traded to its highest level in just over 2 weeks with next resistance at its 50 day MA at 47.06. Spot board crush margins improved $.02 to $.79 ¼ with BO PV closing at 40.9%, the highest since Oct-23. Export sales at 25 mil. bu. were above expectations. Old crop commitments at 1.449 bil. are down 19% from YA, vs. the USDA forecast of down 14%. Census exports in Jan-24 at 219 mil. bu. were up 23.5% from Dec-23 however down 30% from Jan-23. In the first 5 months of the 23/24 MY, exports are down 21% from YA while running 47 mil. bu. over the inspection pace. Meal sales last week at only 158k mt were below expectations. Soybean oil sales at just over 29k mt were above expectations and nearly doubled the YTD commitments as the recent price slump has made BO more competitive in the global vegetable oil market. YTD commitments are now up 3.5% vs. the USDA forecast of down 21%. Chinese imports for Jan/Feb at 13 mmt are down 9% from YA and the lowest since 2019 as crush margins have remained weak on declining hog numbers. Brazilian exports are starting to accelerate as harvest advances. Feb-24 exports at 6.61 mmt was a record high for the month and up 32% from YA. Mch-24 exports are expected to nearly double to 12.8 mmt, however still down from 14.4 mmt in Mch-23.
WHEAT
Big interclass swings in spreads today with Chicago closing $.01 – $.02 lower while MGEX was up $.09 – $.10 and KC was up $.15 – $.18. KC May-24 premium to Chicago surged $.21 to $.46 bu., the highest since Nov-23. Chicago May-24 premium to corn dropped nearly $.12 today to $.90 ½ and has lost over $.75 bu. in the past 2 weeks. The updated US drought monitor showed little change in conditions over the past week despite limited moisture in the plain states and WCB. Export sales at 12 mil. bu. were in line with expectations. Old crop commitments at 677 mil. bu. are up 6% from YA, vs. the USDA forecast of down 4.5%. The USDA did confirm the cancellation of 5 mil. bu. of SRW wheat to China. Today’s weekly sales report showed 49 mil. bu. of SRW sales outstanding to China, which now have fallen to 44 mil. Census exports in Jan-24 at 54 mil. bu. were down 4% from Dec-23 and down 19% from Jan-23. In the first 8 months of the 23/24 MY exports are down 20% from YA. Egypt’s GASC reportedly cancelled their wheat tender. The lowest offer was believed to have come from Bulgaria at just under $226/mt CF. Stats Canada on Monday is expected to show all wheat acres at 26.7 mil., down from 27.03 in 2023.
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