TFM Midday Update 4-10-2024

CORN

The average pre-report estimate for US corn carryout in tomorrow’s USDA report is 2.105 bb versus 2.172 bb in March, which compares to 1.360 bb last year. In addition, global ending stocks are expected to come in at 317.0 mmt versus 319.6 mmt in March and 301.6 mmt last year.
For tomorrow’s report, the trade is looking for Argentine corn production to come in at 55.3 mmt, down from 56.0 mmt in March, but well above the 36.0 mmt last year. As for Brazil, corn production is anticipated at 122.1 mmt, down from 124.0 mmt in March and 137.0 mmt last year.
Outside markets, including gold and crude oil, have been rallying recently. This may indicate that money flow is moving towards commodity markets, which may help support grain prices. Additionally, the higher energies may increase margins for renewable fuels, also lending support to corn and soybeans.
There is talk that China may be restricting corn imports, while this is increasing their domestic prices, it may also decrease world demand. China and Russia have also reportedly pledged to deepen their alliance against the US. Their 2023 trade was up 26% to a record $245 billion.

The soybean complex may be under pressure this morning due to talk that Brazilian vessels are coming into China. Reportedly China bought 30 Brazilian cargoes of soybeans last week. In April, it is estimated that they will receive 6.36 mmt from Brazil, and just 2.83 mmt from the US.
Earlier this morning, the USDA reported a large private export sale totaling 254,000 mt of soybeans for delivery to unknown destinations during the 24/25 marketing year.
The average trade estimate for US soybean carryout in tomorrow’s USDA report is 319 mb versus 315 mb in March, which compares to 264 mb last year. In addition, global ending stocks are expected to come in at 112.6 mmt versus 114.3 mmt in March and 102.2 mmt last year.
For tomorrow’s report, the trade is looking for Argentine soybean production to come in at 50.2 mmt, up slightly from 50.0 mmt in March, and more than double the 25.0 mmt last year. As for Brazil, soybean production is anticipated at 151.7 mmt, down from 155.0 mmt in March and 162.0 mmt last year.

All three US wheat classes are showing some strength this morning, likely due to talk that Russia FOB values have now increased as much as $14 per mt over the past three weeks. This still leaves Russia at a $20 discount to offers from France and Germany, but the rising export values are narrowing the gap.
There is talk that in the future, Russia may incorporate the crop production from occupied Ukrainian territory into their own numbers. This could increase their wheat crop from around 90-92 mmt to 100 mmt. However, even if this is true, the USDA may not recognize the adjustments.
The average pre-report estimate for US wheat carryout is 685 mb versus 673 mb in March and compares to 570 mb last year. Additionally, global ending stocks are expected to come in at 258.6 mmt versus 258.8 mmt in March and 271.1 mmt last year.
According to CPI data this morning, the rate of inflation increased to 3.5% in March versus a year ago. In addition, for the month of March, the consumer price index rose 0.4% from February, which was higher than anticipated. This implies that the Federal Reserve has more work to do in terms of fighting inflation. This also has the US Dollar Index sharply higher this morning, which may cap the upside for wheat futures.

Brandon Doherty