TFM Midday Update 12-13-2023

CORN

Corn is trading lower today while remaining rangebound, but prices have struggled to remain above the 20-day moving average as trade anticipates a corn carryout well above 2 billion bushels.
Argentina’s new president was inaugurated last weekend, and producers in the country have been waiting for new policies to be implemented that would devalue its currency and possibly cut export taxes before they begin selling grain. These policies could trigger selling and may be pressuring prices.
The short-term forecast for Brazil remains hot and dry in the most drought-stricken areas, but heavier rains are expected to fall beginning on December 19 through at least January.
The USDA didn’t make any changes to Brazilian production in last week’s WASDE report, but CONAB has their estimates 10 mmt lower, and other analysts are projecting the crop even lower at 118 mmt.

Soybeans are trading lower today and are likely under pressure from the Argentinian export policy changes that are pressuring corn this morning.
Both soy products are trading lower with the bigger losses in soybean meal due to the January contract trading below the 200-day moving average for the first time since mid-October. Palm oil futures are lower which is pressuring soybean oil.
This morning, the USDA reported private exporter sales of 125,000 metric tons of soybeans for delivery to unknown destinations during the 2024/2025 marketing year. This is the fifth consecutive sale since last Thursday.
Both the USDA and CONAB are estimating Brazil’s soybean crop above 160 mmt, but some private analysts are between 155 and 157 mmt.

All three wheat classes are trading lower today after failing at the 100-day moving average yesterday. There has been a lack of follow through buying from China which has also added to pressure.
The Russian government has banned durum wheat exports until May 31st in order to stabilize prices domestically, but this may indicate that they are beginning to run low on supplies.
Ukrainian wheat production is now forecast to fall to a 12-year low next year to 20.2 mmt as a result of smaller plantings. This would make the smallest production since 2012.
Estimates for world wheat stockpiles in the 23/24 season are now forecast at 319.3 mmt which is up from last month’s estimate of 315.1 mmt as a result of higher production from Russia, Saudi Arabia, and Turkey.

Amanda Brill