Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
CORN
Prices were $.01 – $.02 ½ lower today with most contracts closing at or near session lows. Despite the lower flat price spreads firmed up a bit. May-24 remains stuck in a $4.24 ½ – $4.48 range consolidating just below its 50 day MA. Dec-24 has yet to break out of the range from Mch 28th of $4.60 ¾ – $4.81. Heavy rains fell across drier areas of Western Parana and Santa Catarina and very Northern RGDS in Brazil the past 24 hours. While beneficial for 2nd crop corn production, it will slow the remaining soybean harvest. A couple of different Korean trade groups bought between 65 – 70k mt of US or SA feed corn just below $244/mt CF for shipment by the end of July. Traders estimate Ukrainian agricultural exports in the first half of April totaled 3.5 mmt’s with 3 mmt from Black Sea ports while .5 mmt from Danube River ports. Ethanol production slipped to 983 tbd last week, down from 1,056 tbd the previous week and down 4% YOY. Production was below expectations and the lowest in 12 weeks. There was 98.5 mil. bu. of corn used in the production process, or 14.1 mil. bu. per day, below the 14.65 mbd needed to reach the revised USDA forecast of 5.40 bil. bu. Ethanol stocks dipped to 26.1 mil. barrels, in line with expectations while above YA levels of 25.3 mb. Implied gasoline usage last week inched up .6% to 8.662 mbd, and was up 1.7% YOY. Export sales tomorrow are expected to range from 15 – 45 mil. bu.
SOYBEANS
Prices closed higher across the board however off session highs. Beans were up $.03 – $.05, meal was $3 higher, while oil was steady to 10 better. May-24 beans rebounded after reaching fresh 6 week lows in early trade action. Next support is at the contract low of $11.28 ½. An inside trade for May-24 meal as prices have recovered back above the 50 day MA. Also an inside day for May-24 oil with support at contract low of 44.18. Spot board crush margins improved $.04 today to $.90 ½ bu., the highest in 10 weeks. Soybean meal PV improved to 60.1% matching a 2 month high. Rains are beginning to exit the NC Midwest and ECB with much cooler temperatures expected thru the end of the week. Overnight lows are expected to dip into the mid 20’s this weekend for the Dakotas, along with parts of MN and NW NE. Above normal temperatures are expected to return for much of the nation’s midsection the last week of April. The Biden Administrations threat to raise steel and aluminum import tariffs from China is seemingly having little impact on price action. The market for now seems to have absorbed heavy selling pressure from Brazilian farmers in the past week fueled by a drop in the Brazilian real to a 13 month low. Brazilian bean exports in April are expected to reach 12.73 mmt, while up 1 mmt from the previous est. they would still be down 4% from April-23. Conab estimates harvest has reached 83% as of Sunday. Export sales tomorrow are expected to range from 10 – 35 mil. bu. for soybeans, 150 – 400k mt meal, and -5 – 10k mt of soybean oil.
WHEAT
Prices were lower across all 3 classes today with Chicago and KC down $.10 – $.15 while MGEX was $.05 – $.06 lower. Better prospects for rain in the extended forecasts for areas of the southern US plains are being cited as reason for today’s lower trade. Otherwise no breaking news as markets remain range bound. Spot Chicago remains stuck between $5.25 – $5.75 with KC between $5.50 and $6.05. Tunisia is seeking 25k mt of durum in a tender that expires tomorrow. Jordan is seeking 120k mt of optional origin milling wheat in a tender that expires April 23rd. Iraq’s Commerce Minister claims their country has enough wheat to cover 6 months of consumption. Export sales tomorrow are expected to range from 4 – 18 mil. bu.
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