Written Commentary
SOYBEANS
The soybean complex was lower across the board at today with beans down $.11 – $.14, meal $2 – $4 lower, while oil plunged 120 – 150. Jan-24 beans held support above this month’s low of $12.92 however settled below the $13 level. Jan-24 gained another $.03 against Mch-24 as there were 33 deliverable receipts cancelled with the exchange dropping the total to 497. Jan-24 meal closed into a new 2 month low. Next support is $390. Despite being sharply lower, Jan-24 oil held support above the monthly low at 48.59. US soybean areas in drought increased 3% last week to 51%. Beneficial rains start to fill in over dry areas of Brazil. Heaviest rains so far have favored NC growing regions in Goias. Western Bahia and eastern Mato Grosso. Some areas reporting 1.5” – 2” totals. MGDS has so far received minimal amounts. Off and on showers are expected for the next week to 10 days. Rains are needed into Jan and Feb to restore soil moisture after weeks of above normal temperatures and limited precipitation. Weather across southern Brazil and Argentina to remain mostly favorable. Export sales at 73 mil. bu. were in line with expectations. YTD commitments at 1.299 bil. are down 17% from YA, vs. the USDA forecast of down 12%. Current commitments represent 74% of the USDA forecast, slightly below the historical average of 76%. China/unknown combined to purchase 54 mil. bu. Soybean meal sales at 148k tons were below expectations. YTD commitments are up 16% vs. the USDA forecast of up 4%. Most recent Brazilian production forecasts are coming in below the USDA est. of 161 mmt and Conab’s 160.2 mmt. Late yesterday Celeres issued a forecast of 156.5 mmt, while this AM Rabobank lowered their forecast 5 mmt to 158 mmt. Argentina’s Ag. Ministry raised their soybean acres est. from 16.6 mil. HA to 16.7 mil. HA.
CORN
Prices were up $.02 – $.03 today with Mch-24 experiencing an inside trading day. Next major support is $4.47, the low from early Dec-23 on the weekly bar chart. Resistance is at the 50 day MA at $4.89, followed by the 100 day MA at $4.94 ½. Export sales at 40 mil. bu. were in line with expectations. The US immigration crisis with Mexico likely contributed to this week’s weakness in old crop corn. With the closure of 2 major rail bridges, corn being railed into Mexico has been held up creating bottlenecks. Mexico is by far the largest importer of US corn with 47% of the 2023/24 commitments to date. Total YTD commitments at 1.109 bil. bu. are up 37% from YA, vs. the USDA forecast of up 26%. Commitments represent 53% of the USDA forecast, slightly below the historical average of 55%. The recent drop in price has given US corn a slight advantage to Argentina in the global marketplace. The EU raised their corn production forecast for 23/24 1.5 mmt to 61.4 mmt vs. the USDA estimate of 60.1 mmt. The EU also lowered their import forecast 1 mmt to 19 mmt, well below the USDA est. of 24.5 mmt. Tomorrow’s COF report is expected to show cattle inventories at 102% of YA. US corn areas in drought increased 2% to 46% last week.
WHEAT
Prices were mixed with little net change for the session. Chicago finished with $.02 – $.05 gains, KC futures were within $.02 of unchanged while MGEX was down $.02 – $.04. Chicago just can’t seem to get to far away from its 100 day MA, currently $6.18. Mch-24 KC slipped to a new monthly low before rebounding back to close above $6.25. This mornings updated US drought monitor showed wheat areas in drought were unchanged in the past week. Export sales at 12 mil. bu. were near to low end of expectations. YTD commitments at 546 mil. are up 3% from YA, vs. the USDA forecast of down 4.5%. The European Commission left their 23/24 EU soft wheat production forecast essentially unchanged at 125.7 mmt. They also held their export forecast unchanged at 31 mmt.
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