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Grain Comments: 02.27.24

Good morning. We are beginning to see signs of life in the ag markets. Yesterday’s reversals to the upside have been followed through on so far to start Tuesday’s trade. Seasonally, markets should be bottoming this time of year, but with the funds as short as they are, it is likely we will need to see a change in their opinion before we can get a large rally going. There is also a significantly large amount of unsold grain in the farmer’s hands. Corn futures are 1-2 cents higher, soybean futures are 10-13 cents higher, and the Chicago wheat market is unchanged. Products are mostly higher, soybean meal is up $4-5/ton, while soybean oil is up 30-40 points. Outside markets are mixed/quiet, crude oil futures are trading 20 cents lower, the Dow Jones Index is up 20 points, and the US$ index is down 15 points.

 

Today’s Reports: API Energy Stocks

 

  • Corn futures are seeing support on talk of a premature end to the monsoon season in Northern Brazil. This would be a detriment to the safrinha corn crop, which is estimated to be around 75% planted.

 

  • Producers currently report mostly favorable growing conditions, but a lack of rain during the pollination period later in April/May would be a problem.

 

  • Otherwise, the trade continues to be mostly technical. RSI on March corn bottomed at 17.0 yesterday, which would be the most oversold the market has been since 2014.

 

  • Open interest in March corn futures was down 57,424 contracts on Monday, and March bean open interest was down 22,495 contracts, as traders roll their positions forward or exit them before first notice day Thursday.

 

  • Argentina’s January soybean crush was seen at 2.12 mmt’s, up 11.7% from the December total, and also the largest total since last May.

 

  • Normal levels are closer to 3.5-4 mmt’s/month, and as the new crop harvest increases, it is expected totals in the coming months will return to closer to these levels.

 

  • Monday’s cold storage report showed total red meat supplies were up 4% from last month, but down 11% on the year. Beef supplies were down 1% on the month, and down 11% on the year. And pork supplies were up 9.5% on the month, but down 9.8% on the year.

 

  • Overnight, US President Biden announced Israel had agreed to halt attacks inside Gaza for the Muslim holy month of Ramadan. He also expressed hopes for a temporary ceasefire next week, as Hamas reviews the latest truce offer from the UN.

 

  • Also overnight, Russia ordered a six-month ban on gasoline exports starting March 1 to keep prices stable amid rising demand from consumers and farmers, and also to preform refinery maintenance.

 

  • Rainfall of 0.15 to 1″ was seen in Southern Brazil overnight, with scattered showers across the North. Forecasts are in agreement on coming dryness for N/C Brazil, which should be conducive for soybean harvest.

 

  • Normal rainfall is seen for Southern Brazil into Northern Argentina, which should be enough for filling corn/soybeans.

 

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