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Grain Comments: 03-19-2024

Good morning.

Happy first day of Spring! Markets are mixed with small ranges to start Tuesday, in what has been another mostly quiet overnight trading session. Chatter continues to be centered on South American crop sizes and weather, with most traders patiently waiting for the stocks/seeding reports at the end of the month. Open interest has increased the past few sessions in both corn and soybeans, signaling the buying is possibly more than just fund short covering. Corn futures are unchanged to up a penny, soybean futures are down 2-3 cents, and Chicago wheat futures are up 4-6 cents. Products are mixed, soybean meal is around a dollar/ton higher, while soybean oil is down 30-40 points. Outside markets are also mixed, crude oil futures are unchanged (and only have a roughly 50 cent range), the Dow Jones index is down 80 points, and the US$ index is up 35 points.

Crude oil futures are quiet this morning after trading to their highest level since last October yesterday. Aside from OPEC production cuts, Russian refinery damage, as well as continued hostilities in the Red Sea, have kept prices supported of late.

The Ukraine Ag Ministry announced Tuesday that farmers are expected to sow 3.86 mil hectares of corn, 0.2 mil hectares of spring wheat, 0.94 mil ha’s of spring barley, 5.29 mil ha’s of sunflowers, and 2.2 mil ha’s of soybeans.

If realized, the soybean hectares would be up 0.42 mil y/y, while the corn hectares would be down 0.18 mil y/y.

Also out of Ukraine, the first half of March saw 3.38 mmt’s of ag products cross Ukraine’s borders; this included 1.39 mmt’s of corn and 1.05 mmt’s of wheat. February’s exports totaled 7.34 mmt’s, and March of 2023 totaled 7.45 mmt’s.

Winter wheat conditions for Texas, Oklahoma and Kansas showed a little bit of a mixed bag Monday afternoon but were generally improved; Texas g/ex went from 44% to 46%, Oklahoma g/ex went from 65% to 61%, and Kansas g/ex went from 53% to 55%.

Chinese customs data shows corn imports for February totaled 2.6 mmt’s; this down 28% from January, and down 16% from Feb 2023. Soybean imports were 5.12 mmt’s, down 35% from Jan and down 19% from Feb 2023.

The Financial Times reported Tuesday that the EU was preparing to impose a 95 Euro/ton duty on cereals imported from Russia and Belarus, as well as a 50% tariff on oilseeds and their derived products.

As expected, the Bank of Japan raised its benchmark lending rates Tuesday for the first time in 17 years. BOJ Governor Kazuo Ueda said, “If trend inflation heightens a bit more, that may lead to an increase in short-term rates,” signaling the prospect for further hikes was not off the table.

This comes ahead of the US Fed meeting today and tomorrow, where traders and economists will be closely watching for any clues regarding future rate cuts. The BOJ decision is not expected to usher in a period of rising rates globally.

US Secretary of State Antony Blinken will again be in the Middle East this week, attempting to secure a ceasefire deal between Hamas and Israel. To this point, talks have not gotten anywhere.

Not a lot new overnight on South American weather. Brazil sees rains moving from South to North this week, with concern remaining regarding a longer-term departure of moisture in April.

Argentina sees a mostly favorable forecast, aside from possible local areas of flooding in the Northeast due to excessive rainfall over the past week. Otherwise, temps stay mostly average.

The US Midwest is cold this week to start Spring, with showers forecast for the Lake states Tuesday and Wednesday. Storms are also forecast for the South and Southeast, which keeps weather active there. A potentially severe winter storm is being tracked for the last week of March, with the possibility of snow, wind and ice seen for the parts of the Midwest and Western corn belt.

Have a great day!

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