Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
MORNING OUTLOOK
Month end. Grains are lower. SK is down 15 cents and near 13.91. SMK is near 418.2. BOK is near 49.25. CK is down 7 cents and near 5.42. WK is down 10 cents and near 6.85. KWK is down 11 cents and near 6.40. US Dollar is higher. Crude is lower. Silver and Copper are lower. Coffee, cocoa, sugar and cotton are lower. US stocks are mixed after Thursdays selloff.
On March 15th, CBOT position limits will rise to 57,800 contracts in corn (from 33,000), 27,300 contracts in soybeans (from 15,000 contracts), and to 19,300 contracts in wheat (from 12,000 contracts).
For the week, SRW Wheat prices are up roughly 11 cents; HRW up 3; HRS up 3; Corn is unchanged; Soybeans up 25 cents; Soymeal down $3.00, and; Soyoil up 220 points. Crushing margins were up 2 cents at $0.66 (July); Oil share up 1% at 36%.
For the month, SRW Wheat prices are up roughly 3 cents; HRW up 1; HRS up 3; Corn is down 4 cents; Soybeans up 35 cents; Soymeal down $8.00, and; Soyoil up 500 points. Crushing margins are $0.66 (July); Oil share at 36%.
Chinese Ag futures (May) settled down 73 yuan in soybeans, down 18 in Corn, down 117 in Soymeal, down 22 in Soyoil, and down 12 in Palm Oil. Malaysian palm oil prices were down 42 ringgit at 3,742 (basis May) on money positioning.
Last evening’s GFS model run continued to show beneficial rainfall from northwest Cordoba through Formosa and Salta in Argentina in the next seven days. The midday European Model was wetter for this area compared to the evening GFS model. In Brazil, Mato Grosso will continue to be notably wet in the next two weeks leading to more fieldwork delays.
U.S All Wheat sales are up 4%, shipments down 2% with the USDA forecasting a 2% increase, Corn up 128%, shipments up 79% USDA up 46% and Soybeans up 78%, shipments up 79% USDA up 34%.
SK traded lower and below 14.00. Slow weekly US soybean exports sales offered resistance. Argentina lowered their soybean crop rating 4 pct to 15 pct G/E. Braizl soybean export prices firmed on talk China of China buying. Canada canola prices are lower. Asia prices are also lower.
CK traded below 5.50 on slow US export sales. Argentina raised their corn crop rating to 30 pct G/E vs 24 last week and 59 ly. Brazil corn plantings remain slow but soils moisture levels are improving. WK is down near 6.65. Slow US export sales and lower corn prices is offering seasonal resistance. US is not competitive to N Africa and Mideast buyers. N Africa and Mideast buyers are behind in annual buying needs. Wheat also under pressure due to lower commodity prices and higher US Dollar.
On Thursday, Managed funds were net sellers of 5,000 SRW Wheat; net sold 11,000 contracts of Corn; sold 15,000 Soybeans; sold 4,000 lots of Soymeal, and; sold 2,000 Soyoil. We estimate Managed Money net long 35,000 contracts of SRW Wheat; long 382,000 Corn; net long 181,000 Soybeans; net long 67,000 lots of Soymeal, and; long 131,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 8,500 contracts; HRW Wheat down 1,700; Corn down 49,200; Soybeans down 12,000 contracts; Soymeal up 1,700 lots, and; Soyoil down 7,800.
Deliveries were 7 Soymeal; ZERO Soyoil; 515 Rice; ZERO Corn; 89 HRW Wheat; ZERO Oats; ZERO Soybeans; ZERO SRW Wheat, and; 652 HRS Wheat.
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