TFM Morning Update 05-03-2024

CORN

Corn is trading higher again this morning after two consecutively higher closes which has seen the July contract gain 17 cents over the past three days and is now sitting above the 100-day moving average for the first time since October of last year. December corn is at its highest level since December of last year.
The recent gains in corn are likely a combination of potential planting delays in the US, hot and dry weather for both Brazil and Argentina’s second crop corn, and the very large short position that the funds hold which they have likely been exiting.
Rains continue to fall in the eastern Corn Belt delaying planting, but the western Belt is further along. Delays due to rain could be an issue until May 18, and producers may not be as inclined to sell into this rally if they are unsure of their own production.

Soybeans are trading higher again today with the July contract gaining 45 cents since Wednesday. The November contract is trading above its 100-day moving average for the first time since December of last year. Soybean meal is trading higher again while soybean oil is lower.
In Brazil, the soybean growing areas around Rio Grande do Sul are experiencing flooding which is delaying harvest, and reportedly 25% of the crop in that region is still in the field potentially causing significant losses in production.
Argentina has been having a similar problem to Brazil with too much rain falling to complete their soybean harvest. This is expected to impact total production and could impact the countries soybean meal exports. That is the likely cause for the strength in bean meal futures.

All three wheat classes are trading higher for the second consecutive day with KC wheat once again leading the way as there are concerns about the winter wheat crops quality. July Chicago wheat seems to be stuck in a range between the 100 and 200-day moving average.
Just as weather has been the driver behind the move in corn and soybeans, it has been driving wheat as well. Trade is mainly focused on the lack of rainfall in the Black Sea region and in Russia which will likely impact production, but the EU and India are dealing with adverse weather as well.
Consultancy firm IKAR has lowered its estimate for the 24/25 Russian wheat crop by 2 mmt to 91 mmt. Its export outlook has been lowered to 50.5 mmt from 52 mmt.

Amanda Brill