TFM Morning Update 12-14-2023

CORN

Corn is trading higher this morning along with the rest of the grain complex following yesterday’s Fed announcement that rates would remain unchanged. This caused the dollar to move lower.
While US corn is near the low end of trade, Brazilian corn futures are trading at the equivalent of $6.31 a bushel making US corn much more competitive.
Yesterday’s report from the Energy Department showed last week’s ethanol production at 1.074 million bpd, a strong pace that shows good demand.
Estimates for today’s export sales report are calling for corn sales between 800k and 1,600k tons with an average of 1,245k tons. Sales are expected to be good but likely lower than last week’s.

Soybeans are trading higher along with both soybean meal and oil with help from the decline in the US Dollar which makes US soy products more competitive.
Yesterday’s selloff was due to Argentina’s suspension of their export licenses and likely their selling of what soybean meal producers had left.
Soybean meal prices in the US have sold off sharply now that trade is expecting Argentina to produce a normal soy crop and fulfill their typical crushing capacity which will give them the ability to export large amounts of meal.
With the prices of both soybean meal and oil falling this week, US crush margins have fallen, but this may be temporary as cash meal in Illinois closed $36 above the January futures.

All three wheat classes are trading higher this morning with the March Chicago contract in a bull flag formation that is hugging the 100-day moving average. A strong close above that average could trigger more short covering.
Estimates for today’s export sales in wheat are expected to be strong thanks to all the Chinese purchases and the trade range is between 1,260k and 2,000k tons, far above last week’s 347k.
Most winter wheat crops are looking good for the most part except for in Europe where too much rain has kept the entire crop from getting planted. In the US, the crop could use more moisture.
The Argentinian wheat crop is now expected to increase by 7.4% to 14.5 mmt after recent beneficial rains. This is up from the last guess at 13.5 mmt, and harvest is 57% complete.

Amanda Brill