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Grain Comments: 03-04-2024

Good morning.

Markets are mostly higher to start the new week at the CBOT. USDA will be out with their March monthly supply and demand report this Friday, which will likely keep the trade choppy the next few days. That, along with the March 28th planting intentions report and quarterly stocks report, will be the next market movers over the coming few weeks. Corn futures are 3-4 cents higher; soybean futures are 7-11 cents higher, and the Chicago wheat market is down 1-3 cents. Products are mostly higher, soybean meal trading $4-5/ton higher, while soybean oil is up 5 points. Outside markets are lower, crude oil futures are down 40-50 cents/bbl, the Dow Jones index is down 100 points, and the US$ index is down 5 points.

Fundamental news remains much the same as recent weeks, as traders prepare for the March WASDE report at the end of this week. This report historically has seen sizeable South American crop adjustments when necessary.

March deliveries Monday includes: 113 contracts of corn, 225 contracts of soybeans, 318 contracts of Chi wheat, 32 contracts of Minne wheat, 330 contracts of soybean oil, and 1 contract of soybean meal.

Friday’s COT report showed fund managers ended their selling streak in corn futures, as they were buyers of 45,474 contracts in the week ending Feb 27th. They are now seen short 295,258 contracts.

Funds were also seen short 160,653 contracts of soybeans (-23,976), and 56,326 contracts of wheat (+12,198).

Also, out Friday was USDA’s Fats and Oilseeds report, which showed soybeans crushed in January totaled 5.84 mil tons. This was up 1.9% from Jan 2023.

Report also showed soy oil production at 2.29 bil lbs. (+1.6% y/y), and soy oil stocks at 1.54 bil lbs. (-23% y/y).

Corn used for ethanol was estimated at 433.6 mil bu in January; this was seen down 1.7% from Jan 2023.

Soybean harvest in Brazil was estimated to have surpassed 50% over the weekend and continues to run some 5-10% ahead of average due to drought which accelerated growth.

US federally inspected pork production was down 1.4% last week, totaling 551 mil lbs. Beef production of 497 mil lbs., was up 1.0% on the week.

Farmers in India are planning to escalate their protests this week by entering the Indian capital by bus and train, and by increasing numbers at border points that are already blocked by tractors. The farmers are demanding higher prices for their crops.

OPEC+ announced over the weekend they would be extending voluntary production cuts through June in an effort to keep prices elevated. This announcement was largely anticipated and does not look to have a sizeable impact on futures prices on Monday.

In other oil news and along similar lines, Russia also agreed to cut output by 471,000 bpd; this is seen as being closely correlated with a 400,000 bpd drop in the country’s refinery runs, caused by Ukrainian drone strikes on Russian refining assets.

China’s government announced Monday it would be eliminating an annual press conference by the country’s premier, something that has happened every year since 1993.

This was one of the only times a top Chinese leader took questions from journalists and is seen as appearing to be in line with a general diminishing of the premier’s powers.

Northern Argentina saw fairly heavy rainfall over the weekend, with the South seeing more scattered totals. Showers persist in the North this week, with totals becoming lesser as the week goes on.

Brazil saw scattered showers over the weekend, with a front expected to bring storms into the Southern part of the country later this week.

The US Midwest will see another cold front move from West to East by midweek, bringing scattered storms. Temps return to above average thereafter and are seen remaining that way into the middle of March.

Have a great day!

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