Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
MORNING AG OUTLOOK
Grains are lower. Grains could be seeing month end, quarter end and pre-holiday selling. US stocks are higher. US Dollar is higher. Crude is lower on US inventory build. CBOT will be closed Friday for holiday.
SK is near 11.94. SK-SN carry widening on export concern. Asia palmoil prices are lower. China soymeal futures were lower. Crush margins are also lower. China Feb sow herd down 17 pct vs ly. Feb hog slaughter down 43 pct vs last month. Trade estimates US 2024 soybean acres near 86.5 mil vs 83.6 ly. Trade also estimates US March 1 soybean stocks near 1,828 mil bu vs 1,687 ly. Brazil soybean harvest is near 66 pct. Brazil soymeal export prices are lower. South America soyoil export prices below World palmoil. Baltimore exports demand rerouting to other ports. Key export for John Deere.
CK is down now to near 4.29. Corn trade is now lower on lack of new news and new technical selling. 10 pct of KS and TX dairy herd as tested positive for avian flu but USDA says milk is safe. Trade will watch if this impacts feed demand. Some look for increase US farmer selling old crop stocks before planting. Trade estimates US 2024 corn acres near 91.8 mil vs 94.6 ly. Trade also estimates US March 1 corn stocks near 8,445 mil bu vs 7,396 ly. Brazil 1st crop harvest is 43 pct. Brazil safrina crop conditions near normal but parts of Brazil is drier than normal. Brazil corn exports termed slow. Early Argentina corn yields termed good. After USDA acreage report trade will focus on US spring weather.
WK is near 5.42. Problems with Russia and 2nd largest Russia wheat exporter seems to be priced in the market. Managed funds have now sold back contracts bought last week on Russia slowing RIF export news. Russia allocated 10 pct of 24 mmt Feb-June export quota with RIF getting zero and Grain Gares getting 77 pct. Russia March wheat export could be a record 5 mmt. Australia and Matif futures continue lower looking for demand. This week is USDA acreage and stocks report. Trade estimates US 2024 wheat acres near 47.3 mil vs 49.6 ly. Trade now trading trade estimates of US March 1 wheat stocks near 1,047 mil bu vs 941 ly. After USDA acreage report trade will focus on global demand, US/EU/Russia spring weather and Russia export pace
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