Written Commentary
CORN
US ending stocks were left unchanged at 2.172 bil. The ave US farm price slipped $.05 to $4.75 bu. Global ending stocks for 2023/24 are forecast to increase to 319.6 mmt from 301.6 mmt in 22/23, slightly below expectations and down 2.4 mmt from the Feb-24 WASDE. The USDA made no change to Brazil’s production, holding steady at 124 mmt. Argentine production rose 1 mmt to 56 mmt which was more than offset by a 1 mmt reduction in Ukraine and 1.3 mmt cut in South Africa. Exports rose 1 mmt in Argentina and 1.5 mmt in Ukraine. While Brazilian weather and 2nd crop production prospects will be crucial to price discovery, the markets attention will gradually shift to the US planting season and the stocks/acreage report at month-end. Initial resistance for May-24 corn is the 50 day MA, currently $4.50, followed by $4.63.
SOYBEANS
US ending stocks were left unchanged at 315 mil. The ave US farm price held steady at $12.65 bu. Soybean meal production rose 100k tons without raising crush. Offsetting the higher supplies was a 400k short ton reduction in domestic usage while raising exports 500k tons to a record 15.8 mil. short tons (14.3 mmt). Global ending stocks for 2023/24 are forecast to increase to 114.3 mmt from 102.2 mmt in 22/23, slightly below expectations and down 1.7 mmt from the Feb-24 WASDE. The USDA made no change to Argentina’s production, holding steady at 50 mmt. Brazil’s production slipped 1 mmt to 155 mmt, vs. expectations for nearly a 4 mmt cut. Brazil’s export forecast rose 3 mmt to 103 mmt matching the increased import forecast from China, now up to 105 mmt for the 23/24 MY. The USDA also increased Chinese old crop 22/23 MY imports 3.65 mmt to 104.5 mmt. Spot board crush margins firmed up a few cents to close the week at $.82 bu. with soybean oil PV settling back 1% to 40%. Today’s price action suggests the market is more interested in seeing Conab’s production updates early next week. Next resistance for May-24 soybeans is $11.92 followed by the 50 day MA, currently $12.10 ¾.
WHEAT
US wheat ending stocks rose 15 mil. bu. to 673 mil. due to a drop in exports. Expectations were for stocks holding steady. SRW winter exports dropped 10 mil. while HRW fell 5 mil. The US Ave. farm price slipped $.05 to $7.15 bu. Global stocks are forecast to drop to 258.8 mmt, down from 271 mmt YA and very little changed from Feb-24. Production was increased by .5 mmt or less in Argentine, Australia and Russia with a modest drop in the EU. Exports rose 1 mmt in Ukraine and .5 mmt in Australia. The UN World Food Price Index fell to 117.3 in Feb-24, the 7th consecutive monthly decline, and the lowest reading since Feb-2021. Stats Canada is due out with acreage estimates at 7:30 AM CST on Monday. All wheat acres are expected to slip to 26.6 mil. in 2024, down from 26.9 in 2023. Estimates range from 25.9 – 27.3 mil. KC May-24 extended its premium to Chicago May-24 to $.51, the highest in 4 months.
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