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Grain Comments: 02-07-2024

Good morning.

Selling has resumed at the CBOT to start Wednesday as rains are falling across wide swaths of Argentina. Yield damage has likely been done due to weeks of extreme heat and no rain, but soil moisture levels were some 35% better than average, meaning a severe production loss was likely avoided. Corn futures are 3-4 cents weaker; soybean futures are 13-14 cents weaker, and the Chicago wheat markets are 2-3 cents lower. Products are mixed, bean meal is down $5-6/ton and bean oil are up around 10 points. Outside markets are again mixed, as crude oil futures are up 50-60 cents, the Dow Jones index is unchanged, and the US$ index is down 15 points.

Old crop corn and new crop beans have made new lows this morning, as selling has resumed. A short-covering bounce likely occurs into the close Wednesday, in anticipation of Thursday’s reports.

Trade estimates US corn ending stocks for 23/24 at 2.146 billion bu’s; this compared to 2.162 bil last month.

Trade estimates US soybean ending stocks for 23/24 at 284 million bu’s; this compared to 280 mil last month.

World corn ending stocks estimated at 324.02 bil bu, vs 325.22 last month. World soybean ending stocks estimated at 112.48 bil bu, vs 114.60 last month.

Trade estimates Brazil corn crop at 124.32 mmt’s, vs 127 last month; and estimates Brazil soybean crop at 153.15 mmt’s, vs 157 last month.

Trade estimates Argentina corn crop at 55.59 mmt’s, vs 55.0 last month; and estimates Argentina soybean crop at 50.84 mmt’s, vs 50.0 last month.

CONAB average guess for Brazil production is 150.41 mmt’s for soybeans, and 116.94 mmt’s for corn. These would both be lower than last month.

Hamas has proposed a new ceasefire plan that would see a pause in the fighting for four and a half months. During this time, hostages would be exchanged, and a broader agreement would be reached on an end to the war.

Israel to this point has completely rejected any proposal which included the withdraw of its troops from Gaza, as it continues to assert its intention to completely eradicate Hamas.

In Chinese financial news, it was reported that Wu Qing has been tagged as the new head for securities regulation, as policy makers have struggled to stabilize the country’s main indices following plunges to five-year lows.

Farmers in Spain continued government protests yesterday, as like the rest of Europe, producers here are fed up with cheap imports and government policies that are too expensive to implement. Progress is being made, but farmers demand more.

Today’s weekly ethanol report is expected to show production of 1.021 million bbls, and stocks of 24.478 million bbls. Production would be up from last week, while stocks would be lower.

Weather models continue to advertise good rainfall amounts for most of Argentina between now and February 15/16. A front moves through beginning today into the weekend, with another slated to pass through the area middle of next week.

Have a great day!

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