TFM Midday Update 01-17-2024

CORN

Corn has turned positive this morning. This may be a combination of a technical bounce off the lows, in addition to being pulled higher by the wheat market.
Currently, US corn exports are running 29% above last year, with the USDA estimating a 26% increase. However, Argentina will soon be offering corn for export, and with some estimates of their crop above the USDA’s 55 mmt, pressure may soon be put on US exports.
Central and northern Brazil, along with Argentina, will see some net drying over the next two weeks or so. While this is unlikely to be an issue for their crops, it may nonetheless be viewed as a supportive factor for prices.
Crude oil is still in negative territory as of this writing, but is trading over a dollar off the session low and this comeback may be supporting the positive move in corn.

Chinese data suggests that their economy continues to slow, which may add pressure to equity and commodity markets.
NOPA crush set a December record at 195 mb and was also higher than the trade estimate of 193 mb. Soybean oil stocks also increased 12% versus the previous month.
The USDA is estimating Brazilian soybean production at 157 mmt. However, most private estimates are below that, with a relatively wide range of guesses, between 135 and 153 mmt.
Soybean meal has reversed from yesterday’s higher close. After making a new high this session, it has given all of yesterday’s gains back and then some. Currently, meal is about six dollars per ton lower and this is keeping pressure on soybean futures.

Wheat futures have turned higher this morning, potentially finding some support on rumors that two vessels in the US Gulf are loading with SRW wheat for delivery to China. The news is unconfirmed so far, but would be considered bullish if true.
An estimated 20% of the US winter wheat crop was exposed to the bitter cold temperatures recently. However, winterkill is not expected to be a major issue at this time.
Algeria is said to have purchased up to 650,000 mt of wheat, with the majority sourced from Europe. This may be supporting Matif futures, which are trading higher this morning after making a new low yesterday. If this reversal results in a higher close, it may provide some support to the US market as well.
Russia is said to still be the world’s cheapest wheat offer, with FOB values ranging from $240 to $245 per mt.

Brandon Doherty