TFM Morning Update 12-18-2023

CORN

Corn is trading slightly lower this morning with prices in a consolidating pattern as rainfall over the weekend in Brazil adds pressure.
A new estimate from Safras & Mercado shows Brazilian corn production cut to 129.2 mmt which compares to 135.7 mmt in September and 140.9 mmt the previous year due to a 5.4% decline in planted acres.
The Biden Administration has revealed their plan for sustainable aviation using corn ethanol in jet fuel in a long awaited plan that should boost demand.
Friday’s CFTC data showed funds as buyers of corn last week by 8,963 contracts which reduced their large net short position to 151,570 contracts.

Soybeans are trading lower along with the rest of the grain complex to start the week due to weekend rainfalls in Brazil, but products are steadier with meal essentially unchanged and soybean oil slightly higher.
Last week, Brazil dealt with 7 days of heat and dryness, but the the pattern has changed to show more moisture and is expected to continue through January which could add more pressure to prices.
The USDA’s last estimate for Brazilian production was 161 mmt, but some private analysts expect a slightly lower number near 157 mmt.
Friday’s CFTC data showed funds as net sellers of soybeans by 5,784 contracts bringing their net long position down to 30,849 contracts. They also sold 25,462 contracts of meal reducing that net long position to 92,720 contracts.

All three wheat classes are trading lower this morning. The Chinese sales two weeks ago gave traders some encouragement, but there has been a lack of business done since then.
India had previously floated the idea of importing wheat from Russia as poor weather had damaged their own crop, but this idea has now been abandoned.
Unsurprisingly, Russia has said that it had no interest in restarting the Black Sea grain deal stating that it was a political decision but also that Russia had plenty of buyers for its grain.
Friday’s CFTC report showed funds buying back a large chunk of their net short position by 26,693 contracts which reduced their net short position to 69,529 contracts.

Amanda Brill