TFM Midday Update 01-26-2024

CORN

Corn is trading lower today as South American weather has turned slightly more favorable to end the month, and while export demand has picked up, it is still more sluggish than traders had hoped.
The Buenos Aires Grain Exchange has raised their estimate for Argentina’s corn crop to 56.5 mmt from their last estimate of 55.0 mmt, but good to excellent ratings in the country have slipped by 5 points to 41%.
Sales of ethanol within Brazil have significantly risen this month as they are reportedly running out of storage due to a bumper crop. Total ethanol sales have risen by 44% year over year.
Ethanol production in the US was down sharply last week at only 236,000 barrels per day, but it appeared to be an isolated event that was due to the extreme cold and weather.

Soybeans are trading lower again today after yesterday’s sharp selloff due to pressure from lower soybean meal and an improved South American forecast.
The value of soybean meal and oil have fallen at a slightly more rapid pace than soybeans recently causing crush margins to narrow. This may cause processors to crush fewer bushels.
This morning, the USDA reported a flash sale of 100,000 tons of soybean meal to unknown destinations for the 23/24 marketing year. This comes after disappointing export sales yesterday.
As harvest advances in Brazil, cash prices in the country point to a crop that may not be as damaged as previously believed. March cash soybeans in Brazil are nearly $2 per bushel cheaper than US prices.

All three wheat classes are trading lower today with Chicago wheat posting the largest losses, and the March contract has now fallen well below the 100-day moving average.
There are new reports that China is in talks with Iran to rein in the attacks on ships in the Red Sea or face damaging business relationships with Beijing.
Yesterday’s export sales were nothing to get excited about, but 3 mb of wheat were shipped to China, and 28 mb of wheat have been shipped so far with 60 mb more to go.
Some of the support in wheat has come from ships adding costs from having to travel around Africa to avoid the Red Sea which started talks that the US may be a more viable option for purchases.

Amanda Brill