TFM Midday Update 1-31-2024

CORN

Crude oil is trading lower this morning, which may be adding some pressure on the grain complex. Tension in the middle east may be supportive to oil prices, but resistance is coming from lower potential demand, especially from China.
At these lower price levels, farmers continue to be slow sellers of corn domestically, and may be providing some support to prices. However, increased global competition may hinder any significant rallies.
Yesterday the International Monetary Fund said that they believe the world economy will improve in the second quarter. If true, this may provide some long term support in the marketplace, though there is still concern about Chinese economic issues with poor manufacturing data four months in a row.
The European weather model shows that Argentina will receive some relief from the current hot and dry conditions in just over a week.

There is talk that China may have purchased five to six cargoes of Brazilian soybeans recently.
Private estimates of Brazil’s soybean crop are still well below the USDA’s 157 mmt figure. If the USDA revises production lower on the Feb 8 WASDE report, it would offer some support to soybean futures.
On tomorrow’s crush report, there is expected to be a record December US soybean crush at 206 mb. If true, that would be up from 200 mb in November, and compares to 187 mb last year.
Brazil’s soybean harvest is said to be 11% complete, and their premiums have been dropping lately, which has been pressuring US futures.

With recent news that China will allow wheat imports from Argentina for the first time, there is some talk that Brazil might come to the US for their wheat needs that they normally get from Argentina.
March Paris milling wheat futures made a new contract low today, which is offering no support to the US market.
Russia continues to be the dominant force on the export front, and reportedly their crops are rated 96% good to satisfactory.

Brandon Doherty