Written Commentary
CORN
The late rebound enabled prices to close mixed with bull spreading noted. All contacts closed within $.01 of unchanged. Resistance for Mch-24 is at last week’s high of $4.53 ¼, followed by the 50 day MA at $4.68 ¼. Not much change in SA weather. Conditions in Brazil to remain mostly favorable despite net drying and heat in the southern and west central growing regions. Hot/dry for much of Argentina for at least another week. Crop stress will be most pronounced in southern growing areas. Ethanol production rebounded to 991 tbd last week, well above the 818 tbd pace the previous week, which was nearly a 3 year low. Corn usage reached 99 mil. bu. or 14.2 mil. bu. day, below the 14.7 mbd needed to reach the USDA usage forecast of 5.375 bil. bu. Implied gasoline demand improved 3% last week to 8.144 mbd, however was still down 4% from same week YA. After tomorrow’s close the USDA will release census data showing how much corn was used in the production of ethanol in Dec-23. Export sales tomorrow are expected to range from 32 – 48 mil. bu.
SOYBEANS
The soybean complex was mostly higher with beans up $.03 – $.05, meal was $3 – $5 higher, while oil was mixed closing within a few ticks of unchanged. Mch-24 beans managed to close above yesterday’s high, next resistance at last week’s high at $12.47 ½. Mch-24 meal closed at a 2 week high, next resistance at $373.60. Renewable diesel production rose 6% in Nov-23 to 224 mil. gallons, however still well below the record production of 251 mil. from Sept-23. Combined biodiesel and renewable diesel production however fell 1% to 384 mil. gallons as biodiesel production fell to a 7 month low. Both biodiesel and RD capacity was unchanged leaving the combined at 5.936 bil. annually. Production rates were at 77.6% of capacity, a 9 month low. Soybean oil usage for biofuel production was unchanged at 1.062 bil. lbs. an annualized pace of 12.74 bil. lbs., below the USDA forecast of 13.0 bil. Bean oil usage as a feedstock ticked up to 36.2%. Crush is expected to come in at a record high of 206 mil. bu., above the existing record of 201.5 mil. from Oct-23. Estimates range from 204 – 207 mil. Bean oil stocks are expected to jump 11% from Nov-23 to 1.764 bil. lbs. Despite the expected build, stocks would still be down 23.5% from YA levels of 2.31 bil. lbs. Oil stock estimates range from 1.73 – 1.875 bil. lbs. Export sales tomorrow are expected to range from 20 – 40 mil. bu. for beans, 200 – 450k tons meal, and -5 – 5k tons oil.
WHEAT
Prices were lower across all 3 classes today. Chicago and KC were both $.08 – $.10 lower, while MGEX was down $.06 – $.08. An inside trading day for Mch-24 Chicago with today’s high capped at its 50 & 100 day MA resistance. Same story for Mch-24 KC which is capped by its 50 day MA at $6.29. Heavy rains are expected for the US gulf coast and Delta region this weekend. Good rains are also expected to extend into much of KS and western NE. Russia’s Ag. Ministry raised their 2024 harvested acres forecast by 300k hectares to 84.5 mil. HA. Roughly 20 mil. HA of winter grains were planted last fall with 96% in Good to fair condition in December. Shipping sources indicate Ukraine’s January maritime ag. exports will slip to 3.8 mil. mt, down from 6.1 mmt in December. Export sales tomorrow are expected to range from 10 – 20 mil. bu.
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