Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
SOYBEANS
Soybeans ended higher. SF range was 14.24-14.61. SF started lower on concern that increase civil protest against China strict Covid pace could slow China economy and reduce raw material imports including soybeans. SF and SMF quickly rebounded on fear that Argentina dry weather could shift some global soymeal demand from Argentina to US. Weekly US soybean exports were near 74 mil bu vs 89 last week and 83 last year. Season to date exports are 707 mil bu vs 786 ly. Trade could see USDA drop export goal 50 mil bu in December. Since Sep 1 US soybean exports are near 17.1 mmt vs 19.1 ly of which China is 11.6 vs 12.8. ly. Argentina Jan-Oct soymeal exports were 22.4 mmt vs 25.8 ly. Soybean futures remain rangebound until more is known about SA 2023 weather and crop size.
CORN
Corn futures ended unch. Lack of US farmer selling, strong domestic corn basis and dry Argentina weather offers support. Slow US exports and strong competition from both Ukraine and Brazil offers equal resistance. CH remains in a 6.50-6.75 trading Range. On Friday, Dec corn open interest dropped 62,000 contracts with overall open interest down 46,000. Some feel drop in open interest could be a sign of reduced bullishness in corn. As month end nears most feel there will be limited deliveries. Weekly US corn exports were only 12 mil bu vs 31 last year. Season to date exports are near 228 mil bu vs 339 last year. Some feel final exports could be down 150 mill bu from USDA December estimate. SA weather remains mixed with good rains in N and W Brazil. S Brazil is dry but rains are forecast for first of December. C Argentina could see rains over the next 48 hours. Rest of Argentina is dry.2 week Argentina forecast is dry. July- Oct World wheat trade was 62.8 mmt vs 47.3 ly of which 25.5 was Brazil vs 11.0 ly, US 13.0 vs 15.3 and Argentina 13.7 vs 17.7. EU took 11.3 vs 3.8 ly. Saudi Arabis 2.3 vs 1.0. Corn bears look for lower 2023 corn prices due to higher global supply. Corn bulls feel current tight global supply could help support prices.
WHEAT
Wheat futures ended lower. Some feel US HRW and SRW export prices remain a premium to other origins especially Russia and EU. There was also talk that Iran and may be Egypt may be having problem securing letter of credit for imported wheat. Weekly US wheat exports were 7 mil bu vs 14 last year. Season to date exports. Are near 385 mil bu vs 400 ly. World July through Sep wheat exports were 45.2 mmt vs 50.7 last year. EU exports are 10.2 vs 9.5 ly, Russia 9.9 vs 11.0 ly. Ukraine is 3.1 vs 8.9 ly. Australia 6.9 vs 5.3 ly. Trade looks for US weekly winter wheat crop rating to be up 1 pct form last week to 33 pct G/E. N US South plains weather forecast remains dry. S plains has seen needed rains in parts of TX and OK. Some look for US 2023 all wheat crop near 1,830 mil bu vs 1,650 last year.
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