TFM Morning Update 05-13-2024

CORN

Corn is trading lower this morning after Friday’s gains that followed a bullish USDA report. Futures remain above the 100-day moving average and the December contract is approaching the 200-day which could act as resistance.
While planting progress has certainly been delayed due to recent rains, a good amount of work seems to have gotten done over the weekend in areas that were a bit more dry. This afternoon’s crop progress report will likely still show that planting is behind the 5-year moving average.
Friday’s CFTC report showed funds buying back over half of their net short position in a big move. They bought back 115,527 contracts which now leaves them net short 102,513 contracts.

Soybeans are trading lower this morning with pressure from lower soybean meal while soybean oil trends higher. July soybeans have settled down back at their 100-day moving average while November remains above it.
Friday’s WASDE report was basically neutral for soybeans, but they got a boost from sharply higher soybean oil and friendly numbers for corn and wheat. Once again, the USDA was very conservative with adjusting Brazilian production and only lowered it by 1 mmt. CONAB maintains a much lower estimate that will be updated today.
Friday’s CFTC report showed funds covering a huge portion of their short position buying back 107,783 contracts which leaves them net short just 41,453 contracts. That short covering resulted in a rally of about a dollar.

All three wheat classes are trading slightly higher this morning despite lower corn and soybeans. Wheat is benefitting from more frosts reported in Russia last week, concerning global weather in wheat growing regions, and a friendly USDA report last week.
Friday’s WASDE report showed that old crop ending stocks fell slightly due to an increase in exports, that new crop stocks would be smaller than expected due to lower acreage, and lower world ending stocks due to higher demand and trade which offset the higher production estimate.
As of May 7, funds bought back 5,506 contracts of wheat which leaves them net short 42,360 contracts. The combined short position across the ag complex has shrunken significantly over the past week.

Amanda Brill