TFM Morning Update 04-24-2024

CORN

Corn is trading lower this morning after a three-day rally which has seen the July contract gain 16-1/4 cents since Friday. Prices are currently meeting some resistance at the upper Bollinger Band. The funds have been short covering their near record position which has been the main driver of the rally.
A large weather system is forecast to bring between 1 and 3 inches of rain to the Corn Belt which could delay planting progress but will help areas with poor soil moisture levels.
In Brazil, the wet season is essentially over just as the soybean harvest wraps up. The second crop corn there will largely need to rely on its reserves of subsoil moisture. Argentina’s corn crop has been damaged by disease carrying insects, but the extent of the damage is not known yet.

Soybeans are trading slightly lower this morning but as in corn, have rallied for three consecutive days for a total of 33 cents in gains in the July contract. Prices have met some resistance at the 50-day moving average, and a solid close above that level would be friendly.
Soybean meal is trading higher this morning and has been trending higher since the beginning of the month, but soybean oil is lower as it follows lower palm oil. The gains in soybeans combined with the losses in bean oil have caused crush margins to narrow.
In South America, the Brazilian real has begun to rebound and Brazilian basis levels have moved higher which makes Brazilian soybeans more expensive to the rest of the world. While the US is still not competitive with Brazil, it could push some export business to the US.

All three wheat contracts are trading lower this morning with July Chicago wheat breaking above the 100-day moving average for the first time since January. Chicago wheat has rallied by a whopping 39-3/4 cents over the past three days.
While short covering by funds has driven this rally in wheat, an escalation between Russia and Ukraine followed by the US approving a $61 billion aid package for Ukraine likely has traders nervous. In addition, there have been some concerns over Russia’s estimated wheat production with the weather too dry.
As Russia and the Black Sea region see weather concerns, there has also been a downgrade in winter wheat crop ratings in the US as a result of dry weather. Global weather concerns are another factor in the recent rally.

Amanda Brill