TFM Midday Update 3-13-2024

CORN

With yesterday’s CONAB production numbers of Brazilian corn (and soybeans) well below the USDA figures, there is uncertainty on who to believe. This may lead to some choppy trade in the futures market for the time being.
Production of the safrinha corn crop in Brazil could be affected by the drier and warmer extended forecast in Mato Grosso, their top producing state.
US corn futures have run into resistance around the 40 & 50-day moving averages. This may limit upside potential as some technical indicators, including stochastics, point to overbought conditions and potential sell signals.
Crude oil supplies are shrinking, according to the American Petroleum Institute, which has crude futures higher. This may affect both corn futures and the ethanol market.

Yesterday there was said to be a significant amount of farmer selling of soybeans in Brazil, leading to lower FOB values. This may be in part what has US beans on the defensive this morning.
Heavy rainfall in Argentina is said to be causing localized flooding. Additionally, more rain is expected, and it is causing concern about soybean harvest, as well as crop damage or loss.
Soybean meal continues to trade near the lows and may show long term weakness in anticipation of a higher Argentine supply and crush.
Malaysian palm oil has now hit the highest price a year, due to production problems and good demand. This is also despite India’s February palm oil imports dropping 36% and being the lowest in nine months.

Since last week, China is confirmed to have cancelled 18.5 mb of US SRW wheat purchases. But rumors that there may be more cancellations could be in part what is weighing on wheat this morning. Some are anticipating another 10-15 mb reduction.
Wheat stocks in India are said to have hit a seven-year low. They are a major wheat producer and usually have a surplus to export. However, due to increased domestic demand and weather issues, they may now be net importers.
March Russian wheat exports are projected to be between 4.5 and 4.8 mmt. Additionally, the yearly total is expected at 51 versus 47.5 mmt last year, according to the USDA. Cheap Russian exports continue to limit upside for US futures.
Kansas City wheat futures are running up against resistance around the six-dollar level. Aside from the 40 & 50 day moving averages being near this area, six dollars is also important psychologically.

Brandon Doherty