TFM Morning Update 02-05-2024

CORN

Corn is trading lower this morning due to the prospect of large South American production and the state of China’s economy worrying traders about demand.
March corn is now just three cents off of its contract low posted last week as non-commercials continue to add to their net short position.
The February WASDE report will be released this Thursday, and estimates for Argentinian corn are at 55.8 mmt while Brazil corn is estimated at 124.8 mmt. The Argentinian estimate is higher than the previous month while the Brazil estimate is lower.
Last Friday’s CFTC report showed funds as sellers of 14,866 contracts of corn which leaves them with a very large net short position of 280,151 contracts.

Soybeans are trading lower this morning with pressure from the Brazilian harvest and overall poor export demand. Soybean meal is lower this morning while soybean oil is slightly higher.
The Brazilian harvest is now estimated at 16.22% complete for 23/24 which compares to 9.36% at this time last year. The weather in the northern region has turned more favorable for harvest.
Estimates for Thursday’s WASDE report have Argentinian soybeans at 50.8 mmt, up slightly from the last estimate, and Brazilian production at 153.7 mmt which is down from last month.
Friday’s CFTC report last week showed funds selling 16,405 contracts of soybeans which has increased their net short position to 108,247 contracts.

All three wheat classes are trading lower this morning but remain relatively rangebound with no change for March Chicago on the week last week.
China is reportedly looking to increase the minimum purchasing price of wheat in the country to encourage farmers to grow the grain and also boost yields. This comes as they strive for food independence.
For this week’s USDA report, US ending stocks of wheat are expected to be virtually unchanged while exports may be increased slightly. World ending stocks of wheat are expected to rise very slightly.
Friday’s CFTC report showed non-commercials as sellers of 277 contracts of Chicago wheat increasing their net short position to 64,818 contracts.

Amanda Brill