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Grain Comments: 03.20.24

 

Good morning. Turn around Wednesday this week, as wheat futures are giving back some of yesterday’s gains, while soybeans recover some of yesterday’s losses. Soybeans have continued to hold their downtrend line form the end of February, while corn has again gotten sideways. May corn hasn’t traded below 4.20 or above 4.45 since the last week of February. Corn futures are 1-2 cents lower, soybean futures are 5-7 cents higher, and the Chicago wheat market is down 8-9 cents. Products are firmer, soybean meal is up $2-3/ton, and soybean oil is up 20-30 points. Outside markets are mixed, crude oil futures are down around $1/bbl, the Dow Jones index is down 50 points, and the US$ index is up 30 points.

 

Today’s Reports: EIA Weekly Ethanol Production/Energy Stocks; US FOMC Meeting

 

  • This morning’s weekly ethanol production report is expected to show daily ethanol production in a range of 1.008 to 1.035 mil bbls. Stocks are seen in a range of 25.0 to 26.4 mil bbls. Both estimates are in line with last week’s figures.

 

  • On the backs of US wheat futures, MATIF Milling wheat in Europe closed above the 200 Euro level for the first time in weeks. Front month futures also closed above the 20-day moving average for the first time since December.

 

  • Romania reported that in the first two months of 2024, the port of Constanta handled 1.33 mmt’s of Ukraine grain. February’s total of 0.89 mmt’s, was almost twice as large as January’s volume.

 

  • In more tariff news out of the EU, the union has reached an agreement to extend tariff-free imports of Ukraine corn until June 2025, for quantities not exceeding the average levels of 2022 and 2023. This will not thrill protesting European farmers.

 

  • Brazil’s Anec, in a weekly update, revised their Brazil soy export forecast for the year to 14 mmt’s, vs 13.71 last week. They see corn exports at 146,571 mt’s, up from 134,430, and they see meal exports at 2.13 mmt’s, vs 2.21 last week.

 

  • China announced Tuesday a decision to approve an additional 27 varieties of GM corn seed, and an additional three varieties of GM soybean seed. It is expected to take several years before Chinese farmers begin widely adopting these new seed varieties.

 

  • All eyes/ears in the financial world will be on Jerome Powell at 1pm central this afternoon, as he gives an update from the latest Fed meeting. Rates are not expected to change, but traders will be looking for clues regarding future hikes/increases.

 

  • S&P futures are quiet ahead of the report, after closing at a new all time high again Tuesday. US$ index futures are also trading at 3-week highs ahead of the report.

 

  • In other global economy news, British inflation cooled by more than expected in February, which could possibly give the ECB more confidence to cut rates in the coming months.

 

  • Consumer prices were up 3.4% annually, after increasing by 4.0% in January. Canadian inflation also cooled more than expected, coming in at 2.7%, which was the lowest level since last June.

 

  • Weather models have again added moisture for North/Central Brazil in the 10-day period. Forecast is slightly drier for Argentina, but amid no extreme heat, crops will not be stressed in the next two weeks.

 

Cool air continues to affect the Midwest, with frost advisories seen as far south as the Florida panhandle on Wednesday. Models continue to forecast a possibly severe winter storm into next week, with the heaviest snow/ice/wind/rain expected to hit the Dakota’s and Minnesota.

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