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Grain Comments: 02.28.24

 

 

Good morning. Markets are taking a small breather to start Wednesday, as small ranges have been seen so far in the overnight trade. US lawmakers continue to push for a resolution to the impending government shutdown; a failure to find a solution would be a problem for the ag markets, as data collecting for the quarterly stocks report, as well as the March planting intentions reports, would be disrupted. Corn futures are unchanged to up a penny, soybean futures are unchanged to down a penny, and the Chicago wheat market is down 6-7 cents. Products are mixed, soybean meal is up $1-3/ton following yesterday’s reversal lower, and soybean oil is down 40 points. Outside markets are mixed, crude oil futures are down 70-80 cents/bbl, the Dow Jones index is down 130 points, and the US$ index is up 25 points.

 

Today’s Reports: EIA Weekly Ethanol Production/Energy Stocks; US 2023 Q4 GDP; US PCE

 

  • Markets are quiet with small ranges to start Wednesday’s trade. Total open interest again declined yesterday in both corn and soybeans, with traders liquidating or rolling positions ahead of March first notice day tomorrow.

 

  • As of Wednesday morning there remains just over 64,000 contracts of March corn open, and about 21,500 contracts of March beans open.

 

  • Production estimates for today’s weekly ethanol report are seen in a range of 1.070 to 1.087 mil bbls. Stocks estimates are 25.0 to 26.05 mil bbls. Report will be out at 9:30am central time.

 

  • ABIOVE yesterday dropped their estimate of the Brazilian soy crop from 156 mmt’s to 153.8 mmt’s. This would be towards the high end of most private estimates, which seem to be between 145-150.

 

  • ANEC, a different Brazilian agency, updated their Brazilian soy export forecast for February to 8.5 mmt’s, up from 7.3 in previous forecast. Corn exports for the same month were seen at 716,718 mt’s, which was unchanged from the last update.

 

  • Corn futures on Brazil’s main exchange stopped the bleeding a bit Tuesday, following a nearly 8% decline in the previous two sessions. A specific reason for this sudden drop is lacking, but most feel it is due to global export competitiveness.

 

  • Cash traders have reported that China has bought a substantial amount of Ukraine corn in the past week. Exact amounts are unknown, but Ukraine corn is the cheapest around, even with rising costs due to the Red Sea problems.

 

  • Financial markets begin their data dump for the week this morning, with US Q4 GDP the first item on the docket. Economists look for a 3.3% rate, which would be down from 4.9% in last month’s report.

 

  • Extreme weather has began to show up in parts of the US, as dry conditions and extremely high winds sparked several wildfires in the Texas panhandle.

 

  • Parts of the Cascade mountains are expected to receive multiple feet of snow in the coming week. This is somewhat welcome, as snowpack in the area has been lower than normal this season. This snowpack provides moisture for crops in the valleys throughout summer.

 

  • Tornadoes were seen in parts of the Midwest, including Chicago, as temps went from record highs on Tuesday, to the teens and twenties on Wednesday.

 

  • Temps are again seen returning to above normal by the weekend, with long term guidance still hinting at a warmer than average spring.

 

Brazil sees scattered showers the rest of this week, before more normal rain returns over the weekend. Argentina continues to see scattered showers in the North, while the South remains shortchanged.

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