TFM Morning Update 04-10-2024

CORN

The corn market is higher this morning after a firm opening last night. So far, the market has regained its losses from yesterday, but remains rangebound leading into tomorrow’s USDA WASDE report.
The USDA will release its April WASDE report tomorrow morning at 11 a.m. CDT. The trade is expecting that the USDA will likely increase ethanol use, and exports which could bring 23/24 US corn ending stocks down 70 mb from the March forecast to an average trade guess of 2.102 billion bushels.
The USDA’s projection for South American corn production is expected to drop a little over 2 mmt for Brazil to 121.75 from the March estimate of 124 mmt, while Argentina’s production is also expected to drop slightly to 55.6 mmt from 56 mmt.
Rain is forecast for much of the eastern Corn Belt and the south, which could slow planting progress, but the western Midwest is expected to stay dry.
Brazil corn futures have been on a down trend and are near 3-week lows with much needed rain forecast for the dry areas of the safrinha corn crop.

Soybeans are trading higher across the board this morning in a tight 6 1/4 cent range after a strong opening to the overnight session. Soybean oil is higher with support from higher Malaysian Palm oil and is lending support to soybeans, while meal is lower after giving up overnight gains.
Tomorrow the USDA will update its supply and demand numbers for the 23/24 season. The average trade guess for US ending stocks is for only a slight increase from the March forecast to 317 mb, with a range of 300 – 340 mb. Overall, the sentiment is that they will lower exports and increase crush demand.
The USDA’s estimate of South American soybean production is expected to drop for Brazil, to just under 151.68 mmt versus 155 mmt in March, while Argentina may see a slight bump up to 50.5 mmt from 50 mmt.
Chinese Dalian soybean and soybean meal are lower this morning on market talk of increased soybean and soybean meal imports from Brazil. It’s been reported that China bought 30 cargoes of Brazilian soybeans and that their export premiums are on the rise, which should make US offers more competitive.

The wheat complex is higher across the board this morning with KC leading the way higher. Both Chicago and Minneapolis are challenging their respective 50-day moving averages, while KC is currently above it and challenging Tuesday’s high.
In tomorrow’s USDA report, the trade is looking for about a 17 mb increase to 23/24 US wheat ending stocks to 690 mb from last month’s forecast of 673 mb, likely on lower exports.
The USDA currently projects Russian wheat production at 91.5 million metric tons, while Argus has raised their estimate to 92.1 million metric tons from 90 million previously.
It’s being reported that Russia will begin incorporating wheat from occupied Ukrainian territory beginning this year, which could bring their crop to over 100 mmt. It is not expected that the US will follow the same practice.

Scott Masters