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Grain Comments: 03-11-2024

Good morning.

Ag markets are lower to start the new week, as the rest of the world digests Friday’s USDA data. Prices started higher Sunday night before retreating off the open. How the trade perceives the report is of more importance than what the report actually says, especially in a time when the majority of daily trade is run by computers/algorithms. Monday and Tuesday’s trade action will be telling as far as short-term market direction. Corn futures are 3-4 cents lower; soybean futures are 6-7 cents lower, and the Chicago wheat market is down 1-2 cents. Products are mixed, soybean meal is down roughly $3/ton, and soybean oil is up 20 points. Outside markets are mostly lower, crude oil futures are down 20-30 cents/bbl, the Dow Jones index is down 100 points, and the US$ index is unchanged.

Another USDA report has come and gone, as traders now turn their attention to the weather and the coming US Spring planting season.

Stats Canada will update their spring planting intentions this morning, while CONAB will give its March monthly S&D update on Tuesday. Otherwise, the quarterly stocks report and seeding intentions report at the end of the month will be the next big data day for ag markets.

Friday’s COT report showed managed money traders have now set a new record short soybean position, just weeks after setting a new record short corn position.

Managed money is now estimated to be short 171,999 combined contracts of soybean futures and options as of the week ended March 5th. The previous record was set in May of 2019. This marks the 16th consecutive week of selling in soybeans.

Managed money is now also estimated to be short a combined 296,795 (-1,537) contracts of corn futures/options, and short a combined 65,539 (-9,213) contracts of wheat futures/options.

According to the Rosario Grains Exchange, Argentina’s corn export lineup hit its highest levels in nearly five years recently, spurred on by leftover stocks from 2023. As of March 1, the group estimated warehouse stocks at some 9.6 mmt’s, a 10% increase from the 5-year average.

The exchange also added soybean crushing had rebounded strongly in February, showing a 17% y/y increase from 2023. However, crush was down 5% from January.

The US Federally inspected pork production fell 21 mil lbs. last week, to 530 mil lbs. Beef production at 484 mil lbs., was down 2.6% on the week. YTD pork production is up 0.7%, while YTD beef production is down 4.5%.

According to the Malaysia Palm Oil Board, Malaysia’s palm oil stocks fell from 2.02 mil tons in Jan, to 1.92 mil tons in Feb. Production dropped from 1.4 to 1.26 mil tons, and exports declined from 1.35 to 1.02 mil tons.

Financial markets will be mostly quiet data-wise on Monday, with the main event this week being Tuesday’s US inflation report. Last month’s reading left stock indexes reeling on a higher-than-expected CPI number, which leaves traders on high alert for tomorrow’s numbers.

Weather models over the weekend did not see much change for South America, and the models continue to be in good agreement, which raises confidence.

North/Central Brazil will be mostly dry over the next 10 days, raising concerns for the second corn crop, but expediting soy harvest. Southern Brazil into Argentina is slated to receive normal rain and have normal temps in the 10–15-day period.

The US Midwest again sees above average temps to begin the week, with a front expected to bring cooling and storms from East to West by the end of this week. A pattern shift then occurs beyond next weekend, as a high-pressure ridge moves into the West, and areas East of the Mississippi see a chance at cooler air into the first of April.

Have a great day.

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