Written Commentary
CORN
Prices were down $.05 – $.06 today with all the old crop contracts establishing fresh contract lows. Spot Mch-24 has fallen to the lowest level on the weekly chart since Dec-2020. Next support is at $4.09. Weighing on prices was the Rosario Grain Exchange raising their Argentine production forecast 3 mmt to 59 mmt, above the USDA est. of 55 mmt. Argentina continues to offer corn below US prices thru the Spring months. Traders also brace for bearish data from the USDA later this week at the annual Outlook Conference. Average estimates expect 24/25 MY corn ending stocks building to roughly 2.5 bil. with production at 15.1 bil., despite acres falling 3 mil. to 91.6 mil. Today’s EIA report showed ethanol production rebounding to 1,083 tbd last week, up from 1,033 tbd the previous week. Average daily corn usage at 15.5 mbd was well the 14.64 mbd pace needed to reach the USDA corn usage forecast of 5.375 bil. If last week’s pace held thru the 23/24 MY, corn usage would reach 5.55 bil. bu. Implied gasoline usage last week fell 7.3% to 8.168 mbd and was down 1.3% from same week year ago. Ethanol stocks jumped more than expected to 25.8 mb, matching the highest level in 50 weeks. Export sales tomorrow are expected to range between 32 – 60 mil. bu.
SOYBEANS
The soybean complex was lower across the board with beans $.10 – $.16 lower, meal was down $1 – $3, while oil slipped 70 – 95. Mch-24 beans broke out to the downside settling below support at $11.75. Next support is at the contract low of $11.45 ¼ set last May. Resistance is at last week’s high of $12.05 ½. Mch-24 oil traded below yesterday’s low before rebounding into the close. Mch-24 meal held support above LW’s low of $341. Spot board crush margins kicked up another $.02 today to $.94 ½ bu. with oil PV drifting back to 40.3%. South American weather remains supportive for crop development. Nearly all of RGDS in far southern Brazil received moisture in the past 24 hours with heaviest totals favoring the eastern half of the state. A few more dry days across Northern growing regions of Brazil, favorable to harvest activities, before additional rains are expected Fri. thru Monday. The Rosario Grain Exchange raised their Argentine production forecast 2 mmt to 52 mmt. Traders expect the Outlook Conference to show 24/25 MY beans stocks building to 420 mil bu with production at 4.425 bil, while planted acres increase just over 3 mil. to 86.7 mil. NOPA crush on Thursday’s is expected to show 189.9 mil. bu. of soybeans were processed by NOPA members in Jan-24, down from the all-time record of 195.3 mil. in Dec-23, however above the 179 mil. in Jan-23. Bean oil stocks are expected to build to 1.41 bil. lbs. up from 1.36 bil. lbs. in Dec-23. Export sales tomorrow are expected to range between 12 – 28 mil. bu. for soybeans, 250 – 450k tons meal, and -5 – 7k tons of soybean oil.
WHEAT
Prices were lower across all 3 classes today with Chicago down $.11 – $.14, while KC and MGEX were $.07 – $.10 lower. Mch-24 Chicago held above support at last month’s low of $5.73 ¼. New contract lows for both MGEX and KC. Spot KC fell to its lowest level since July-2021 while MGEX has reached its lowest level since April-2021. Mch-24 KC recovered to close back above Mch-24 Chicago after trading down to an $.08 discount yesterday. SRW wheat stocks/use ratio remains by far the tightest class at 24.5%. Little to no rain is expected for the Southern US plains in the upcoming 7 days. Jordan is seeking another 120k mt of optional origin mill wheat for May/June shipment in a tender that expires next Tues. Feb. 20th. Ukrainian Ag. shipments in the first 10 days of Feb. have reached 1.6 mmt, with the vast majority, 1.5 mmt, passing thru the Black Sea. The remainder passing thru the Danube River. SovEcon raised their Russian wheat production forecast 1.4 mmt to 93.6 mmt, above the USDA forecast of 91 mmt. Export sales tomorrow are expected to range from 12 – 20 mil. bu. Egypt’s GASC has announced a snap tender for shipment of wheat in April. The tender closes tomorrow.
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