TFM Morning Update 03-06-2024

CORN

Corn is quietly trading back and forth near unchanged this morning in a tight 2-cent range as the market prepares for Friday’s USDA WASDE update.
Later today the EIA will release its weekly ethanol production report. Analysts surveyed by Bloomberg are expecting lower production totaling about 1.071 mil. barrels/day with an increase in stocks to 26.132 mil. barrels. If realized this would be the highest stocks figure since last March.
So far this season since July 1, it’s estimated that Ukraine’s corn exports are down 16% year over year according to their Ag Ministry. Currently, Ukraine’s corn export prices are the cheapest in the world, though US offers remain competitive when considering freight.
In Friday’s WASDE report, the market is expecting to see a slight reduction of the US carryout projection by 17 mb, but the market may focus more on the Argentina and Brazil production estimates. Little change is expected to Argentina’s crop, but a 1.6 mmt reduction to Brazil’s is expected.

The soybean complex is mixed this morning with soybeans mixed and near unchanged with a 9cent range. While meal trades lower continuing yesterday’s weakness, and bean oil firmer as it continues to consolidate.
Soybean basis bids firmed yesterday, according to merchandisers, at processing plants and elevators as the futures market slid and farmer selling remained light. Basis at river terminals was mostly unchanged.
Analyst Dorab Mistry stated that he expects Southeast Asian palm oil production to drop by 1 million metric tons in Indonesia and remain stagnant in Malaysia the world’s two largest palm oil producers. He also expects total demand to increase by 6 mmt with supplies increasing just 3.1 mmt which could press prices higher for the world’s most prominent veg oil and support bean oil prices.
Friday’s WASDE report isn’t expected to include any major surprises, but analysts expect that the US soybean carryout will see a slight increase by about 5 mb on reduced exports. A main focus by the trade will be on South American production. The Argentine soybean crop is expected to increase slightly to 50.3 mmt, while Brazil’s is expected to decrease to 152.8 mmt, from last month’s 156 mmt forecast.

The wheat complex is lower this morning for all three classes, as it follows through from yesterday’s weakness.
Low export prices out of the Black Sea and Russia continue to pressure the wheat market. Black Sea FOB values dropped below $200 per mt, with Russia just above that level; this keeps the US uncompetitive in terms of exports. Additionally, since July 1, Ukraine’s wheat shipments are estimated to be about 4% higher than this time last year, with 163k mt shipped so far in March.
According to Interfax, Vladimir Putin stated that he expects Russia to export 65 mmt of grain for the 23/24 season, which is 5 mmt more than the nation exported last year.
On Friday’s USDA report, there are few changes expected to the US numbers. The average pre-report estimate for US wheat carryout is 658 mb, which would be unchanged from last month. The world ending stocks estimate comes in at 259.2 mmt versus 259.4 last month. There is a chance that the USDA could lower US wheat exports from the current 725 mb.

Scott Masters