TFM Midday Update 4-25-2024

CORN

The USDA reported corn export sales of 51.2 mb for 23/24 and 10.3 mb for 24/25. Last week’s shipments at 67.3 mb were well above the 40.5 mb pace needed per week to reach the export goal of 2.1 bb.
Yesterday’s ethanol production data was disappointing, coming in below expectations for the second week in a row. It was down 3% from the previous week and also well below the pace needed to meet the USDA’s corn usage forecast of 5.4 bb.
The Biden administration is reportedly set to release a climate model regarding subsidies for sustainable aviation fuel on Tuesday. This will determine how and if ethanol producers will qualify for tax credits in the production of these fuels. With gasoline usage expected to decline, this is viewed as a way for ethanol production to remain profitable.

The USDA reported soybean export sales of just 7.7 mb for 23/24 and 4.4 mb for 24/25. Last week’s shipments at 15.3 mb surpassed the 12.9 mb pace needed per week to reach the export goal of 1.7 bb.
GDP data today showed that the US economy grew slower than expectations. The market was looking for a 2.2% increase, but it came in at 1.6% today, which is the lightest growth since 2022. This may renew US economic concerns, which may in turn affect the commodity complex.
Malaysian palm oil has been sharply declining, which is pressuring both soybean oil and soybean futures. Soybean oil is also said to have lower margins, and as Brazil nears completion of their harvest, they are expected to be dominant on the global export market.

The USDA reported wheat export sales of only 3.0 mb for 23/24 and 13.7 mb for 24/25. Last week’s shipments at 21.1 mb surpassed the 17.1 mb pace needed per week to reach the export goal of 710 mb.
India’s wheat supplies have reportedly hit 16-year lows. After a couple years of reduced yields, the government sold record volumes of wheat from their reserves to tame domestic food inflation. Now India needs to replenish supplies, but their purchases are down 25% vs a year ago; they may need to step up to import as much as 3-5 mmt wheat from other countries.
Rain is expected to cover much of the Midwest this week and into the weekend. However, the American and European weather models are somewhat in disagreement. The American model keeps dryness in Texas and Oklahoma, but the European model shows more rain will benefit HRW wheat areas.

Brandon Doherty