Written Commentary
CORN
Prices finished $.02 – $.04 higher led by new crop. Early strength in corn and soybean oil was largely attributed to news that EPA administrator Micheal Regan would be joining USDA Ag Secretary Vilsack at the Commodity Classic in Houston on Mch 1st. That is the same day the EPA is scheduled to update their model on measuring carbon intensity for US biofuels. This measuring update is key to corn based ethanol and renewable diesel in qualifying for tax credits in the production of Sustainable Aviation Fuel. Also this AM its being reported the EPA and Biden Administration will approved the year round sale of E15 gasoline beginning in 2025. Mch-24 scratched out a new contract lows in early trade, however wasn’t able to establish a key reversal day. Export inspections at 36 mil. bu. were in line with expectations. YTD inspections at 713 mil. bu. are up 32% from YA, vs. the USDA forecast of up 26%. The USDA did announce the sale of 155k tons (6 mil. bu.) of new crop 24/25 corn to Japan. Brazil’s first corn crop harvest has reached 29% as of last Friday. 2nd crop plantings have reached 59%, up 21% for the week and well above the 40% pace from YA. As of Feb. 13th, EU corn imports totaled 10.9 mmt, YOY comparisons weren’t provided. ANEC forecasts Brazilian corn exports will reach barely over 700k tons in Feb-24, well below the 1.9 mmt from Feb-23.
SOYBEANS
The soybean complex was mixed with beans up $.06 – $.10 better also led by new crop, meal was $2 – $3 higher, while oil was down 20 – 25. Mch-24 beans gapped higher overnight only to trade back within a ¼ cent of filling the gap by mid-morning. Prices recovered again by midday. Resistance for Mch-24 meal is at last week’s high of $355.90. Support for Mch-24 oil is at this month’s contract low at 44.49. Spot board crush margins slipped $.04 to $.85 ½ per bu. Good rains were distributed across much of Brazil over the 3 day weekend. Heaviest rains this week will be in the northern growing areas with some flooding potential in the NC and NE. Dry conditions across much of Argentina this weekend which is likely to extend until late in the week before beneficial rains are expected. Export inspections at 44 mil. bu. were in line with expectations. YTD inspections at 1.175 bil. bu. are down 23% from YA, vs. the USDA forecast of down 14%. The USDA did announce the sale of 228k tons of meal to the Philippines. Money managers last week sold 4,200 contracts of soybeans extending their short position to 134,500 contracts, their largest since May-2019. Dr. Michael Cordonnier lowered his Brazilian production forecast another 2 mmt to 145 mmt, below the Conab est. of 149.2 mmt and the USDA est. of 156 mmt. Brazil’s bean harvest has reached 32%, up from 23% LW and ahead of the 25% from YA. EU soybean imports as of Feb. 13th have reached 7.2 mmt. ANEC forecasts Brazilian soybean exports will reach 7.3 mmt in Feb-24, just shy of the 7.55 mmt exported in Feb-23.
WHEAT
After establishing fresh contract lows for spot Chicago and MGEX in early trade, prices surged higher. While KC traded lower, it did hold above last week’s low. Both Chicago and KC Mch-24 contracts established key reversal trade today. Next resistance for Mch-24 Chicago is at the 100 day MA at $6.01. Next major resistance for Mch-24 MGEX is at $6.86. Much of the US Midwest is expected to remain in a warmer than normal pattern with rains this week favoring the eastern corn belt. Dry across much of the plain states and WCB. News igniting today’s rally wasn’t readily apparent, at some price level you just run out of sellers. Export inspections at 14 mil. bu. were in line with expectations. YTD inspections at 444 mil. bu. are down 17.5% from YA, vs. the USDA forecast of down 4.5%. Ukraine’s Ag. exports Feb. 1-15 reached 3.1 mmt, up from 2.2 mmt the same period in January ANEC forecasts Brazilian wheat exports will reach 716k tons in Feb-24, up 37% from Feb-23.
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