TFM Morning Update 02-22-2024

CORN

Corn is trading slightly higher this morning but the gains are minimal compared to yesterday’s losses. Pressure from fund selling and improving weather in South America continues to press prices near contract lows.
On the world front, US corn export prices are becoming less competitive around $190 per metric ton. Brazil is currently closer to $183, and Ukraine is down around $167.
Open interest in corn has stopped rising by much as basis contracts begin to be priced which reduces the size of the commercials long position. Non-commercials were also estimated to be sellers yesterday of 7,000 contracts.

Soybeans are trading slightly higher along with corn and wheat this morning after yesterday’s significantly lower prices which saw the March contract just 12 cents away from its May low of $11.45-1/4.
A large factor in yesterday’s lower prices in the grain complex came from the release of the Federal Reserve meeting minutes which showed that the Fed is more concerned about cutting rates too fast rather than keeping them high.
This morning, soybean meal is slightly higher while soybean oil is lower. Crush margins in the US have leveled out after falling to lows in January, but they are still profitable.

All three wheat classes are trading higher this morning with the majority of gains in the KC contract. Wheat has behaved interestingly this week as it is set up for a gain of over 20 cents this week while corn and soybeans have sold off on the week.
El Nino is expected to steadily weaken this spring with four of the seven climate models predicting a neutral ENSO pattern by April, with all seven in agreement that the current El Nino pattern will end by May.
Russia continues to lower its wheat prices as it competes with Ukraine. Russian FOB offers as low as $218/mt are they lowest that have been reported since 2020. Ukraine has been lowering its prices to match Russia’s and has picked up some export business as a result.

Amanda Brill