Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
MORNING OUTLOOK
Grains are higher. SF is up 14 cents and near 11.95. SMF is near 396.0. BOF is near 38.77. CZ is up 5 cents and near 4.28. CH21 is near 4.34. WH21 is near 6.07. KWH21 is near 563. US stocks are higher. US Dollar is lower. Crude is higher. Gold is lower. Vaccine news lifting equities, energy and most commodity markets.
Soybean futures tested 12.00. Concern about 2021 South America crops and increase US demand for soybean exports could push nearby soybean futures over 12.00. For the last 7 years nearby soybean futures have been in a 4.00 range with 12.00 the top. Trade over could suggest a new 4.00 range with an objective of 16.00. Most look for US 2020/21 soybean carryout between 65 and 115 mil bu versus USDA 190. Most look for US 2021 soybean acres near 89.0 and carryout between 135 and 200. Talk of lower World vegoil supplies and higher demand could send soyoil future over 40.
Overnight, nearby corn futures made new highs. Concern about 2021 South America and Ukraine crops and increase US demand for corn exports could push nearby corn futures closer to 4.50. Most look for US 2020/21 corn carryout near 1,550 mil bu versus USDA 1,702. Most look for US 2021 corn acres near 92.0 and carryout between 1,535 and 1,715.
Wheat prices/futures are mostly a weather market. Direction of US Dollar and the duration of the virus and impact on US/World economies could dictate wheat prices. Final Black Sea 2021 wheat supplies and exports could also determine wheat prices. Wheat prices could also follow corn. Some feel WH21 could be in a 5.90-6.50 range and KWH 5.50-6.30. Most look for US 2021 wheat crop near 1,934 mil bu with carryout near 875.
On Friday, Managed funds were buyers of 2,000 contracts of SRW Wheat and 3,000 Corn; bought 7,000 Soybeans, 1,000 soymeal and sold 1,000 lots of soyoil. We estimate the funds are net long 16,000 wheat, 270,000 corn, 215,000 soybeans, 105,000 soymela and 90,000 soyoil.
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