TFM Midday Update 12-28-2023

CORN

Corn is trading near unchanged to slightly lower today, as it maintains its narrow range. The shortened holiday week has caused light volume, and managed funds are likely taking profits ahead of the new year.
Weather forecasts for Brazil show improved chances for heavy rain in central Brazil and notably the key growing area of Mato Grosso. Argentinian weather is also expected to be good.
The USDA’s last estimate for Brazilian corn production was 129 mmt, but Brazil’s estimates are lower at 118 mmt. Estimates for Argentina were at 55 mmt, but their final production could be higher.
The export window for US corn should extend over the next few months while South America waits to harvest, and export demand in the US is already 36% higher than a year ago.

Soybeans are trading slightly lower today, but have been on either side of unchanged as the light holiday volume causes volatility.
Soybean meal is lower today, while soybean oil is slightly higher, but overall, both soy products have fallen over the past few weeks, which has hurt crush margins.
The USDA will release its updated WASDE report on January 12, and expectations are that Brazilian production will be lowered from 161 mmt and that US exports will be reduced to 50 mb due to low demand.
Argentina’s soy crop is estimated at 48 mmt, or potentially higher thanks to very good weather conditions early in the season and good soil moisture.

All three wheat classes are mostly higher near midday, thanks to a technical break to the upside. Funds are heavily short and are likely buying back contracts into the end of the year.
Yesterday, a bulk carrier in the Black Sea hit a mine, which damaged the carrier and injured two people. This further adds to the shipping issues seen in that region.
SovEcon has cut their Russian wheat export estimates to 48.6 mmt, which compares to a previous estimate of 48.8 mmt, as increasing freight rates cause weaker shipment numbers.
The US dollar is lower again today and has fallen sharply over the past few months, which has been supportive to wheat in the global export market. China has not made a large purchase in weeks, but the lower dollar makes the US more competitive.

Amanda Brill