TFM Morning Update 12-19-2023

CORN

Corn is trading slightly lower this morning and is near the bottom of its trading range as forecasts for the driest parts of central and northern Brazil begin to show improved rain chances through the end of the month.
Yesterday, open interest in corn rose by nearly 50,000 contracts which suggests that funds are adding onto their short position in response to rising shipping costs.
With rebels attacking in the Red Sea region and low water levels in the Panama Canal, shipping costs globally are rising, and this will likely affect costs in the US.
Brazilian first crop corn planting is now reportedly 96.8% complete as of December 15 which compares with 94.4% last year.

Soybean futures are lower this morning and have given back all of yesterday’s gains as scattered showers fall in Brazil with a friendlier long-term forecast.
Yesterday’s rally can be attributed to Argentina’s proposal to increase export taxes on soybean meal and oil to 33% from 31%. Trade had initially expected the Argentine government to enact a policy that was more friendly to producers.
Both soybean meal and oil are trading lower this morning, and the recent selloff in both has caused crush margins to slip slightly.
Brazilian soybean planting is now reported at 94% as of December 14 which compares with 91% the previous year, but some have had to be replanted or were planted in extremely hot and dry conditions.

All three wheat classes are trading slightly lower this morning but were higher overnight as rumors circulate that China may be looking to buy more US wheat.
There was a tender overnight issued by Egypt to buy wheat from Russia which comes after it purchased a large volume yesterday. The theme of the world relying on Russia for cheap wheat has been a constant bearish factor.
In northern France, some sowings are looking unlikely to be completed due to overly wet conditions. Nearly 10% of planned soft wheat areas are unsown in France.
Ukraine’s demand for wheat and other grains out of the Danube River has begun to slip as shipping costs rise and more wheat leaves via the Black Sea corridor.

Amanda Brill