TFM Morning Update 02-07-2024

CORN

March corn is lower this morning, down to a new contract low ahead of Thursday’s USDA WASDE report.
Chinese corn futures have rallied in the last two weeks and are approaching a $4 per bushel premium to US futures. Brazilian corn values are over $1 per bushel higher than US futures and about 40 cents per bushel higher than US Gulf export prices.
Estimates for South American production in the WASDE report have Argentinian production higher at 55.8 mb and Brazilian production slightly lower at 124.8 mmt.
A frontal system across Argentina is expected to deliver much needed moisture after a two-week stretch of dryness and excessive heat. Rainfall in Brazil’s largest producing regions should be diminishing this week after a wet stretch to allow second crop corn planting to progress along.

Soybeans are down sharply this morning giving back much of the early week rally in prices.
China is moving aggressively to prop up their equity markets in an attempt to bolster consumer confidence. The strength of the Chinese economy is vital to world soybean demand.
Conab, the Brazilian national supply company, is scheduled to release its latest crop estimates Thursday at 9 am local time. A pre-report Bloomberg survey shows analysts expect the estimate to come in just above 150 mmt, this would be down about 5 mmt from their January estimate.
The USDA in January pegged the Brazilian soybean crop at 157 mmt. Analysts expect the USDA to make about a 4 mmt cut to the Brazilian soybean estimate in Thursday’s report. Argentina’s soybean crop size is expected to see a slight increase tomorrow from the USDA going from 50 mmt in January up to 50.8 mmt.

Wheat is lower across the board this morning following both corn and soybeans.
US ending stocks for wheat are still pegged at the second tightest in the last decade, wheat prices have been unable to find reason to rally but appear to be building support near current prices.
Weather in most of Europe has been mild and dry for the majority of the winter so far. The greatest moisture deficits are appearing in southern Europe and northern Africa. Temperatures are expected to continue to be warm with no threat of an arctic freeze.
Long-term moisture deficits still remain in portions of the US Plains but a continued active pattern should help to gradually ease those deficits.

Keegan Madigan