TFM Midday Update 01-24-2024

CORN

Corn is trading higher today and is so far on track for a small gain on the week. Support has come from an uptick in exports, as well as some weather concerns in Brazil.
On February 15, the USDA will hold its Ag Outlook meeting, and many analysts are expecting a decline in planted corn acres for 24/25 with one firm projecting 1.6 million acres fewer from last year.
Brazil’s first crop corn production was estimated lower due to fewer planted acres, and now weather is a concern for the second crop corn. Some analysts are forecasting total production at 115 mmt which is below the USDA’s last estimate of 127 mmt.
Overnight, South Korea bought 136,000 mt of corn which is expected to be sourced from the US, South America, or South Africa. US corn has become competitive with other global offers.

Soybeans are trading are trading mixed after trending higher following last Thursday’s low. Futures were significantly oversold, and the short-term drier forecast for Brazil and Argentina may have added support.
Soybean meal is higher for the second day in a row but has been trending lower while soybean oil is lower despite gains in crude oil. Crush margins have narrowed recently but remain profitable.
Private analysts are still predicting that the USDA’s last estimate for Brazilian production is too high at 157 mmt, with most guesses between 149 and 154 mmt. While weather has improved, the 14-day forecast is drier.
China is expanding its efforts to become more self-sustainable by implementing the use of GMO soybeans and corn but will still need to import from the US and South America.

All three wheat classes are trading higher today with Chicago wheat leading the way. Weather in the US has been beneficial for winter wheat, so the recent increase in prices could mean that funds are unraveling a portion of their net short position.
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.
Shipping issues are still a concern in the Red Sea, but China is reportedly taking steps to de-escalate the tensions.
Iraq’s wheat harvest this year is expected to top 6 mmt which would be up from 5.19 mmt the previous year as the government has implemented more support for farmers in the country.

Amanda Brill