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Grain Comments: 03-21-2024

Good morning.

Ag markets are so far following through on Wednesday’s strong closes, as both corn and soybean futures have made new highs for their respective moves this morning. Yesterday’s US$ selloff is giving raw material markets a lift. Corn futures are again challenging 38% retracement from the December high, and this will be the key level to watch today and tomorrow. Consecutive closes above $12 would be short-term positive for soybeans. Corn futures are trading 3-4 cents higher, soybean futures are trading 4-5 cents higher, and the Chicago wheat market is up 2-3 cents. Products are mixed, soybean meal is up $2-3/ton and has also made new highs, while soybean oil is down 20-30 points. Outside markets are mixed/quiet, crude oil futures are trading 30-40 cents/bbl lower, the Dow Jones index is up 75 points, and the US$ index is up 20 points.

This morning’s weekly export sales report is expected to show corn sales in a range of 800k to 1.4 mil mt’s, soybean sales in a range of 250k-800k mt’s, and wheat sales in a range of (200k)-500k mt’s.

Non-commercial European wheat traders reduced their net short position in MATIF wheat futures last week by around 7.7k contracts and are now seen short of roughly 100.8k contracts.

COCERAL updated its 2024 EU crops forecast; the group now sees the total wheat crop at 130.5 mmt’s, down by 2.8 mmt’s from both their previous estimate and last year’s production. The group cited adverse planting weather as the main reason for the cut.

EU barley crop is estimated at 52.8 mmt’s, up 2.1 mmt’s from the previous estimate, and the EU corn crop is estimated at 64.3 mmt’s, which would be up 0.7 mmt’s from the previous estimate.

Some feel excessive rains in the North/Northeast of Argentina have caused yield loss and are citing this as a reason for the recent pop in futures prices.

USDA ag attach√© in China sees Chinese soybean imports for the 2024/25 marketing year reaching 103 mmt’s. The report also mentions revising both crush and import data from 2023/24 and 2024/25 to “reflect historical adjustments made in the March 2024 WASDE report.”

In financial news, the Fed expectedly left rates unchanged during March’s meeting, but did adjust their projection for 2025 to only three reductions, vs four projected previously.

Fed Chair Powell’s comments were viewed as slightly more hawkish than previously, which gave stock index futures a boost to new highs in Wednesday afternoon’s trade.

The Swiss Central Bank announced a surprise rate cut overnight, dropping rates for the first time in nine years. And the ECB will give its policy decision later this afternoon.

Weather forecasts for South America are little changed from yesterday’s runs. N/C Brazil sees good rains into the end of March, while NE Argentina could use a few dry days.

Heavy rains in Mato Grosso, Goias, and Minas Gerais are welcomed ahead of April, which is usually the start of the dry season in Brazil. A replenishment of soil moisture will greatly benefit the safrinha corn crop.

Winter weather advisories have sprung up across the Northern corn belt on Thursday ahead of this weekend’s winter storm event. Storms begin Thursday/Friday and last into the early part of next week. The heaviest snow totals are now seen mostly in Minnesota.

Otherwise, the forecast is mostly consistent with previous runs. The South/SE will see the best chances of rain over the next week, with the East coast into New England also receiving good moisture. Temps remain on the cool side through the first week of April.

Have a great day!

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