At the time of this writing, corn is trading higher and the March contract is on track for a fourth consecutively higher close following drier South American weather and US exports that are picking up.
With US corn so inexpensive and the South American corn harvest just beginning, this is the window for the US to get corn sold, and between the last export sales report and last week’s flash sale, demand is picking up.
Brazil’s first crop corn harvest is now 8.4% complete as of January 19 which compares to 1.5% a year ago and the 5-year average of 5.8%.
Brazil’s first crop corn is already projected to be smaller than the initial estimates due to a decline in planted acres, and now it’s being estimated that the safrinha corn crop will be smaller than expected as well due to the El Nino pattern and smaller planted area.
Soybeans are trading higher today but have backed off their earlier morning highs, just as both soybean meal and oil. Soybean oil is higher along with crude and Malaysian palm oil.
Brazilian weather is forecast to be wetter over the next week, but early drought in the central and northern regions of the country may have damaged some of crop too heavily for this late rain to produce strong yields.
The USDA’s last estimate for Brazil’s 23/24 soybean crop was 157 mmt, but more analysts are reducing their estimates which are now closer to the 150 mmt mark. One analyst estimated as low as 135 mmt but that is not likely.
Led lower by soybean meal, the value of soy products has fallen over the past few months along with soybeans. This has caused crush premiums to narrow, but they remain profitable.
All three wheat classes are trading higher today led by KC wheat. Slush and snow are falling across the eastern Midwest with more chances for rain over the next week. Overall, winter wheat conditions are looking better than last year.
Australia’s wheat crop which was previously under drought conditions has been receiving beneficial rains, and now a larger crop is expected with some analysts projecting 30 mmt.
Yesterday’s export sales were soft again at 314k tons but were slightly higher than last week. A good portion of that wheat is bound for China which is encouraging.
The European wheat crop has seen cold and dry weather conditions to start the year, but Russia’s wheat crop is reportedly not damaged thanks to the insulating layer of snow.
Sign up to get daily TFM Market Updates straight to your email!