TFM Midday Update 03-08-2024

CORN

Census data yesterday indicated that the US exported 27% more ethanol in January when compared with a year earlier. Additionally, total 2023 exports were up 7% from 2022 and ethanol production is said to be running 5% above the level from a year ago.
The US corn export commitment is up 27% versus last year. The USDA is expecting an increase of 26% so it is doubtful that there will be any adjustments made in today’s report.
Argentina has more rain in the forecast, and their crops are already in pretty good shape. This should benefit later planted crops but may cause some delays for the corn harvest that has just begun.
There are rumors that China purchased US corn from the PNW, however, there has been no official confirmation yet.

The US soybean export commitment is down 19% from last year. However, the USDA is forecasting a 12% decline, leading some to believe that they may lower the export number on today’s report.
CONAB is estimating Brazil’s soybean crop at 149.4 mmt, but some private estimates are at 145 mmt or below. The USDA is currently well above these estimates.
May soybean oil futures broke above the 21-day moving average yesterday, and above the 40-day moving average during the current session. However, they have since reversed and are currently trading below both averages.
Palm oil is higher for the third week in a row due to tightening supply and expectations for solid demand.

Another cancellation of US SRW wheat sales to China for the 23/24 season was announced this morning, this time for 110,000 mt. This may be already somewhat baked into the market, however, as wheat is up slightly this morning while corn and soybeans are lower.
The US Dollar Index has been falling over the past few sessions and is now around 102.50. This may ease some of the pressure on wheat futures seen recently.
Egypt reportedly cancelled their wheat tender because prices were too high out of Russia and Ukraine. Given the continued drop in Black Sea values recently, as well as lower US prices, this is somewhat surprising. Perhaps this indicates that they are holding out for more of a decline.
Funds are still net short a hefty 85,000 Chicago wheat contracts. This keeps the market primed for a short covering rally, but it may first take some friendly news to act as the catalyst.

Brandon Doherty