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Grain Comments: 02-09-2024

Good morning.

The USDA report has come and gone, and markets are trading mostly lower this morning. Report was viewed as neutral to slightly bearish, with attention now being turned to US spring crop insurance pricing, and the near record combined grain/oilseed short from the funds. Corn futures are 2-3 cents lower; soybean futures are 8-9 cents lower, and the Chicago wheat market is mixed, up 2 to down 2. Products are lower, soybean meal is down $3-4/ton, and soybean oil is down 5-10.

Thursday’s data dump did not provide much in the way of shocking developments. Numbers were mostly as expected. There continues to be wide divide between USDA and CONAB on Brazil crop sizes.

When combining last year’s production and this year’s, there exists a nearly 14 mmt difference between the two government agencies. This has a sizeable impact on balance sheets, and leaves traders confused as to who is right.

Soybean meal futures again made new lows this morning. The arrival of Argentine exportable supplies will hinder US meal exports going forward, but the current book of business for US soymeal is record large.

Corn and soybean futures have not made new lows for the week as of this writing but sit right above current lows and support levels.

The BAGE yesterday released their weekly crop condition report. Argentine soybean conditions were seen at 31% g/ex, down from 36% last week; fair was 47% compared to 50% last week, and p/vp was 22%, up from 14% last week.

Corn conditions in Argentina were seen at 31% g/ex also, down from 34% last week. Fair was seen at 54% vs 55% previously, and p/vp was seen at 15%, up from 11%.

Soil moisture ratings declined during the week also, going from 77% optimal last week, to now just 60% optimal this week.

Canadian grain stocks out yesterday showed wheat stocks for 2023 were down 10.3% from 2022, at 20.681 mmt’s. Canola stocks were seen 1.3% higher y/y, oat stocks were down 40.3%, and soybean stocks were up 9.8%.

Rain has fallen overnight across Cordoba and Santa Fe in Argentina. 5-day totals through the weekend are estimated in a range of 1.5-4″ for the area. The GFS and the EU model are in good agreement on coming rainfall.

Northern Brazil continues to see near normal rainfall for the next 10 days. Generally, a South American weather threat is currently lacking in the forecasts, following weeks of abnormal heat and dryness in Argentina.

Markets likely chop today into the close as volatility stays elevated.

Have a great weekend!

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