Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
MORNING OUTLOOK
Grains are higher. SK is up 19 cents and near 14.69. SX is up 10 cents and near 12.94. Both new highs. 15.00 and 13.25 next objectives. SMK is near 412.3. 420 next objective. BOK is near 57.14. CK is up 6 cents and near 5.98. CZ is up 4 cents and near 5.25 and new highs. 5.50 next objective. WK is up 5 cents and near 6.57. KWK is up 4 cents and near 6.16. MWK is up 5 cents and near 6.69. 7.00 next objective. Higher trade linked to exploding higher US domestic soybean and corn basis. Crushers may be bidding up for coverage. US stocks are lower. US Dollar is mixed. Crude is higher. Gold is lower.
Chinese Ag futures (September) settled up 34 yuan in soybeans, down 1 in Corn, up 46 in Soymeal, up 104 in Soyoil, and up 126 in Palm Oil. Malaysian palm oil prices were up 2 ringgit at 3,712 (basis July) at midsession supported by rising exports.
US Midwest 6-10 day forecast calls for below temps north above in southwest. Rainfall below normal is southwest and above around Great lakes. Brazil is dry. Argentina is wet. Canada prairies are dry.
There is talk Canada bought 2 Ukraine rapeseed cargoes foe August delivery. Ukraine is limiting new sunoil exports. Some talking Brazil 2nd corn crop production could be down 20 pct. Palmoil following higher soyoil. Talk of lower US summer soybean crush and higher biofuel demand is helping soyoil futures. Higher China prices is helping soymeal.
U.S. Winter Wheat headed was 10% versus 3% a year ago, 14% average. TX is 41. U.S. Winter Wheat was rated 53% G/E versus 53% a week ago and 57% a year ago. PNW wheat down 7-10 pct. U.S. Spring Wheat planted was 19% versus 7% a year ago, 12% average.
U.S. Corn planted was 8% versus 4% a week ago, 6% last year, and 8% average. IL 12 vs 7, IA 4 vs 2, KY 26 vs 23. U.S. Corn emerged was 2% versus 1% last year, and 1% average. There is talk US famers may not increase acres over intentions due to higher input cost and lack of nitrogen supplies. U.S. Soybeans planted was 3% versus 2% last year, and 2% average.
For the week ending Apr 15th, Wheat exports are running unchanged versus a year ago and USDA forecasting a 2% increase on the year, Corn up 84% versus USDA up 50% and Soybeans up 67% versus USDA up 36% on the year. USDA too low on US corn exports.
On Monday, Managed funds were net even SRW Wheat; and net bought 12,000 contracts of Corn; net bought 7,000 Soybeans; 4,000 soymeal and; sold 1,000 Soyoil. We estimate Managed Money net long 1,000 contracts of SRW Wheat; net long 426,000 Corn; net long 172,000 Soybeans; long 52,000 Soymeal, and; net long 96,000 Soyoil.
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