Written Commentary
CORN
Prices finished $.04 – $.06 lower in an outside day down. US corn ending stocks dropped 50 mil. bu. to 2.122 bil. in line with expectations. Ethanol and feed usage were both increased 25 mil. bu., no changes to exports. The Ave. US farm price slipped $.05 to $4.70. Global stocks fell 1.3 mmt to 318.3 mmt, slightly above expectations. The USDA made no change to Brazil’s production forecast keeping it at 124 mmt vs. the revised Conab est. of 111 mmt. The production gap between the USDA and Conab actually widened. The difference in export forecasts is even wider with the USDA at 52 mmt, vs. Conab’s at 31 mmt. Argentine production was cut only 1 mmt to 55 mmt, still well above most private estimates. Earlier today the Rosario Grain Exchange slashed their Argentine production forecast 6.5 mmt to 50 mmt, while this afternoon the BAGE lowered their est. another 2.5 mmt to 49.5 mmt. Both exchanges citing disease pressure for their lower forecasts. Harvest is reported at 15% complete. There was conflicting information from China overnight pertaining to corn demand. In their monthly crop report the Govt. raised their corn import forecast for 2023/24 MY 2.5 mmt to 20 mmt, still below the USDA forecast of 23 mmt. At the same time, it’s been reported Chinese importers have cancelled 4-5 cargoes of imports from Ukraine claiming they were following Govt. orders in an effort to boost domestic prices for farmer heading into planting season. Export sales were on the disappointing side at 13 mil. bu. which were a MY low. YTD commitments at 1.739 bil. are up 17% from YA vs. the USDA forecast of up 26%. Current commitments represent 83% of the USDA forecast below the historical average of 85%. Still much uncertainty in the corn market as production differences between USDA and SA continue to grow. For now prospects for a good jump to US plantings appear to be winning out.
SOYBEANS
The soybean complex was mixed with beans down $.04 – $.06, oil was 140 – 160 lower, while meal was up $3 – $5. Spot board crush margins were little changed however meal PV surged over 1% to 59.3%. Soybean ending stocks rose 25 mil. bu. to 340 mil. slightly above expectations however within the range of estimates. Exports were cut 20 mil., imports cut 5 mil. with seed/residual down 11 mil. The Ave. US farm price fell $.10 to $12.55. No changes to the domestic meal balance sheet. Bean oil stocks rose 45 mil. lbs. to 1.627 bil. after a 95 mil. lb. increase in production and imports, which was partially offset by a 50 mil. lb. increase in exports. Global bean stocks held steady at 114 mmt, roughly 1.5 mmt above expectations. There were no changes to either Brazil’s or Argentina’s production est. as they were left at 155 and 50 mmt respectively. Earlier Conab lowered their Brazilian soybean production .3 mmt to 146.5 mmt. After today’s close, the BAGE lowered their Argentine production forecast another 1.5 mmt to 51 mmt. Harvest progress was pegged at 11%. The USDA made no change to their Chinese import forecast of 105 mmt. Soybean sales at 11 mil. bu. were at the low end of expectations. YTD commitments at 1.501 bil. are down 19% from YA vs. the revised USDA forecast of down 15%. Current commitments represent 88% of the new USDA forecast, below the historical average of 94%. Shipments are down 18%. Soybean meal sales at 188k tons at the low end of expectations. YTD commitments are up 14% from YA, vs. the USDA forecast of up 8%. Soybean oil sales at 3k tons were in line with expectations. YTD commitments are down 15% from YA, vs. the USDA forecast of down 21%.
WHEAT
Prices were down across all three classes today. MGEX was down $.13 – $.15, KC was off $.08 – $.11, while Chicago was $.06 – $.07 lower. US wheat ending stocks rose 25 mil. bu. to 698 mil. slightly above expectations however also within the range of estimates. Feed usage was cut 30 mil. bu. while imports fell by 5 mil. Exports held steady at 710 mil. By class stocks changes were HRW -5 mil., HRS +20 mil, white +6 mil. and durum +4 mil. The Ave. US farm price fell $.05 to $7.10. Global stocks slipped less than 1 mmt to 258.3 mmt, in line with expectations. Export rose 1.5 mmt for Ukraine, 1 mmt for Russia, and .5 mmt for Australia. Exports were cut by 2 mmt for the EU and .5 mmt for Argentina. Wheat exports at 13 mil. bu. (3 mil. – 23/24 MY, 10 mil. – 24/25) were in line with expectations. Old crop commitments at 692 mil. up 3% from YA, vs. the USDA forecast of down 6.5%. Commitments represent 97% of the USDA forecast, above the historical average of 94%. Shipments are down 3%.
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