Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
SOYBEANS
Prices turned sharply lower today with soybeans and oil lower for the week. Beans were $.17 – $.20 lower, meal was down $4 – $5, while oil was down just over $.01. May-24 beans held above this week’s low closing near its 50 day MA $11.93 ½. May-24 meal rejected trade above its 50 day MA at $343.90, however managed to close slightly higher for the week. May-24 oil closed into new lows for the week, violating support at 48 cents. Next support at its 50 day MA of 46.95. Spot board crush margins fell $.04 this week to $.77 ½, very near the lowest levels since last summer. Meal PV gained 1.2% this week to 58.7%. No change in SA weather. Saturated soils in Southern Brazil and EC Argentina are drying out following waves of heavy precipitation in recent weeks, eventually enabling soybean harvest to resume. The BAGE held their Argentine production forecast unchanged at 52.5 mmt, vs. the USDA est. of 50 mmt. With flooded areas in SA drying out and US export demand so-so the speculative traders for now have stopped covering short positions. Farmers in both hemisphere’s were quick to reward the mid-week market rebound with fresh sales.
CORN
Prices were $.01 – $.02 lower today in choppy 2 sided trade. Prices movement seemed limited by weakness in the soybean complex being offset by strength in wheat. May-24 has backed up a touch after reaching new 5 week highs yesterday. Resistance above yesterday’s high is $4.63. First support is at last week’s low of $4.31 ¾. Healthy rains will spread over most of central and northern growing regions of Brazil thru the end of March providing a much needed boost in moisture reserves for the 2nd corn crop. Heavy rains across the Gulf coast and Delta region will delay early planting efforts. Yesterday the BAGE lowered their Argentine production forecast 2.5 mmt to 54 mmt, below the USDA est. of 56 mmt. Harvest is still in its early stages at 4% complete. This morning the USDA announced the sale of 263k mt (10.4 mil. bu.) to Mexico, of which 173k tons was old crop and 90k for 2024/25 MY. March 1st cattle of feed at 101% of YA was a touch above expectations of 100.9%. Placements at 110% of YA were well above expectations of 106.3%. Marketing were slightly below expectations of 103.9%, coming in at 103%.
WHEAT
Prices rebounded today, closing higher across all 3 classes. Chicago and KC were up $.07 – $.09, while MGEX was up $.04. Chicago May-24 traded to its highest level in over 2 weeks, briefly penetrated the top end of its recent range before pulling back into the close. KC May-24 held just below key trendline and MA resistance near $5.95. A spring storm has brought a mix of precipitation across much of the northern Midwest. The next system will start off in the northern plains over the weekend spreading east thru early next week bringing additional relief to drought areas of IA, MN and WI. Egypt has confirmed they have stopped purchasing wheat thru private negotiations, returning to sourcing all supplies via tenders. The EU is proposing adding a 95 euro tariff ($103) to grain imports, and 50% for oilseeds from Russia and Belarus. Russia raised their wheat export duty nearly 5% to 3,298.6 rubles/mt for the period Mch. 27th thru April 2nd.
All charts provided by QST
>>See more market commentary here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2024 ADM Investor Services International Limited.
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.
