TFM Midday Update 3-11-2024

CORN

China’s producer price index was lower for the seventeenth straight month. This may be offering some weakness to commodity markets this morning.
Brazil is not expected to receive much rain over the next 10 days. The weather maps do have some rain in the extended forecast, but at this time there is not much confidence in that. Argentina on the other hand has moisture in the forecast over the next 10 days or so.
Significant US inflation data will be released this week including CPI, the federal budget deficit, PPI, jobless claims, among other reports. The equity markets may be anticipating unfriendly news since they are lower this morning, and some of this weakness might spill over into commodities.

On Friday’s WASDE report, the USDA raised Chinese soybean imports, which is the first time they have deviated from China’s numbers and the pace of imports to date. This is interesting given the fact that on the report, Brazilian supply wasn’t really adjusted in any way that would reflect this change.
Malaysian palm oil stocks are said to have hit a seven-month low at 1.91 mmt. Additionally, palm oil production is at a ten-month low. This is aiding soybean oil which is trading higher this morning. Also having a potential impact on soybean oil will be the release of the NOPA crush report this coming Friday.
Brazilian soybean basis has been improving since late January at a time when harvest is over 50% complete. This may indicate that producers are holding out for higher prices, or that the crop is smaller than what the USDA is saying, or a combination of both.

This morning, private exporters reported another cancellation of US SRW wheat for delivery to China in the amount of 264,000 mt for the 23/24 season.
Last week the USDA did lower US wheat exports from 725 to 710 mb for 23/24. This may be in part due to recent Chinese cancellations, along with the continued pressure from cheap Russian exports.
Between Chicago and Kansas City futures, the managed funds are said to be short about 105,000 contracts as of last Tuesday.

Brandon Doherty