Written Commentary
CORN
Prices were $.03 – $.05 higher today closing near session highs. Late strength being attributed to rumors China was cancelling up to 10 cargoes of corn purchases from Brazil with hopes the demand will be switched to the US now that our prices are below SA origin thru at least Feb/Mch-24. Although Mch-24 traded to a 2 week high, it stopped short of the 50 day MA resistance at $4.94 ¼. The next resistance is the 100 day MA at $5.02 ¾. The Korean Feed Association bought 65k mt of feed corn in a snap tender for $265.50/mt CF from optional origin. Shipment is expected from late Feb to early April. The CEO of Brazil’s largest publicly traded farming company, ALC Agricola, expects their 2nd crop corn acres will be down 7.5% due to soybean planting delays. Ukraine has exported 7 tons of cargo, including 5 mmt of grain shipments, from Odessa area ports since Aug. 8th. Since July the EU has imported 7.36 mmt of corn, down 43% from YA. The USDA has left the US corn ending stocks unchanged in 3 of the last 4 December WASDE reports. Ethanol production tomorrow is expected to increase from last week’s 7 week low at 1,011 tbd pace.
SOYBEANS
The soybean complex was mixed with beans steady, meal up $4 – $10, while oil was 85 – 100 lower. Intraday Jan-24 soybeans violated support at $12.97 ½ only to recover on rumored Chinese buying. Next support is the Oct-23 low at $12.70 ¼. Jan-24 oil slipped below $.50 before recovering. Jan-24 meal held support at yesterday low before recovering to close above yesterday’s high. While rains in the dryer areas of Brazil have been scattered and sporadic, they appear to be enough to fulfill crop needs over the next week to 10 days. The area of most concern continues to be NE Brazil in Bahia as rains have been less frequent. Conditions in southern Brazil remain wetter than desired. While much of Argentina has benefited from recent rains, a short term slowdown in rain frequency should enable field work to progress smoothly. Spot board (Jan-24) crush margins jumped $.11 today to $1.66 ½, with soybean meal PV jumping 1% to 62.4%. The CEO of Brazil’s ALC Agricola estimate their soybean acres will be down 5% due to early season drought in Mato Grosso while expected yields are expected to drop 7%. AgRural estimates Brazil’s soybean crop is 85% planted, up from 74% LW and down from 91% YA. They also lowered their production forecast just over 4 mmt to 159.1 mmt. EU soybean imports since July have reached 4.66 mmt, unchanged from YA. Their meal imports at 6.3 mmt are down 11.5% from YA. I expect no change to US soybean ending stocks however would not rule out a 15 – 25 mil. bu. shift from exports to crush to support the renewable diesel expansion.
WHEAT
Prices closed higher across all 3 classes today with KC and MGEX up $.03 – $.05, while Chicago was up $.08 – $.11. Today marks the 6th consecutive higher close in wheat as Mch-24 Chicago is up $.75 from last Monday’s low, while KC is up $.67 from its low. Mch-24 KC closed above its 50 day MA for the first time in 4 months however, held just below last month’s high at $6.70 ½. Chicago Mch-24 traded to a 3 month high settling just below its 100 day MA at $6.32 ¾. The USDA announced another sale of 198k tons (7.2 mil. bu.) of SRW wheat to China. That makes just over 23 mil. bu. the past 2 days. Egypt’s GASC bought a total of 180k mt of wheat in their recent tender. They bought 120k mt from Russia at $255/mt FOB, $278.25/mt CF with payment via 270 day letters of credit and 60k mt from Ukraine at $250/mt FOB, $269/mt CF with immediate payment. Shipment is from late Jan-24 to early Feb-24. SovEcon notes that Russian wheat exports in Nov-24 at 3.4 mmt were down from 4.3 mmt in Nov-23 largely due to harsh weather in the Black Sea which disrupted ship loadings.
See more market commentary here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
