TFM Morning Update 02-20-2024

CORN

Corn is trading higher this morning after a loss of 12-1/2 cents in the March contract last week and its lowest close in the life of the contract on Friday.
Non-commercials are near their record short position in corn and may have even broken that record as of last week. Traders will expect a bottom in corn once the funds begin unrolling that large short position.
Brazil’s estimated corn production for 23/24 has been reduced to 125.9 mmt by Safras & Mercado which compares to their estimate of 140.1 mmt in December.
Friday’s CFTC report showed that as of Tuesday 13th, funds sold an additional 16,597 contracts of corn increasing their net short position to a near record 314,341 contracts.

Soybeans gapped higher this morning after last week’s lower prices. China is back from its holiday today and is expected to begin buying soybeans again, but most of the business will likely go to South America.
In Brazil, soybean premiums improved last week despite the ongoing harvest. Farmers were unwilling to sell at the low prices causing premiums to improve.
The Brazilian harvest is now 31.10% complete which compares to 24.78% at this time last year. South American weather remains favorable.
Last week’s CFTC report showed non-commercials as sellers of 4,200 contracts of soybeans which increased their net short position to 134,500 contracts and nearing their record short position.

All three wheat classes are trading higher this morning after making and recovering from a double bottom at $5.56-1/4 in March Chicago wheat.
Russian wheat exports are currently on track to total 52.9 mmt in 23/24, but that number could drop to 48.1 mmt in the following marketing year according to the consensus forecast.
Australia is currently forecast to be hit by a third tropical cyclone within two months with a system forming off the northern coast and could make landfall near Queensland. This could be detrimental to the wheat crop there.
Friday’s CFTC report showed funds as buyers of 11,066 contracts of wheat which reduced their net short position to 55,672 contracts.

Amanda Brill