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Grain Comments: 03-22-2024

Good morning.

Ag markets have started out lower to wrap up the week. The US$ index is trading its highest level in a month, which is weighing on the ag space. Traders will mostly be keying in on weather over the weekend, as there aren’t a whole lot of other fundamental headlines. After today, just three full trading sessions remain before next Thursday’s quarterly stocks/acreage report. Corn futures are trading 2-3 cents lower, soybean futures are trading 10-14 cents lower, and the Chicago wheat market is down 4-5 cents. Products are lower, soybean meal is down around $4/ton, while soybean oil is down 50-60 points. Outside markets are quiet/mixed, crude oil futures are unchanged to down 10 cents, the Dow Jones index is down 50 points, and the US$ index is up 40 points.

This afternoon’s cattle on feed report is expected to show the US cattle herd up 0.9% from a year ago. Placements are seen 6.2% higher, and marketings are seen 3.9% higher.

Weekly crop conditions in Argentina saw minor changes this week from the Buenos Aires Grain exchange; soybean g/ex rating was seen at 31%, vs 30% last week. Normal was down 1% to 53%, while p/vp was unchanged at 16%.

Corn conditions were a little more varied; g/ex was dropped 1% to 24%, normal was down 3% to 55%, and p/vp was up 4% to 21%. Of note, the exchange also lowered their production estimate for Argentina by 2.5 mmt’s.

Thursday’s drought monitor update showed minor improvement for the Midwest, with the most improvement noted in the East following good rains in the Ohio River valley over the last week. Iowa still sees nearly 84% of the state in some type of drought.

US Commercial red meat production was up 6.8% y/y in February. Beef production was seen up 3.6% y/y, while pork production was up 9.9% y/y.

Barge shipments down the Mississippi River were seen at 464k tons in the week ending March 16th, down from 593k tons last week. Corn shipments were down 18%, while soybean shipments were down 25%.

This afternoon’s CFTC report is expected to show managed money traders reduced their net short positions in both corn and soybean futures in the last week. Risk-reduction has been the theme this week, ahead of next week’s reports.

Stocks index futures look to have their best week of 2024 this week, following more hawkish comments from a plethora of global central bank meetings.

Today, markets will be looking ahead to next week, where inflation signals from the US, Australia and Japan will be at the forefront for traders and economists.

Weather-wise, there are not a lot of changes overnight for South America. The majority of Central Brazil will see rainfall of 3-4″ above normal over the next 10 days, which helps to boost soil moisture in safrinha corn areas.

Areas of Southern Brazil and Northern Argentina will see a drier pattern over the next 10 days, which is welcome following heavy rains recently. Temps are average to below average for much of Argentina and Brazil.

For the US, heavy snow starts today into Montana and the Dakotas and continues to move East into Minnesota through the weekend. Some areas could see as much as 12″ of snow over the next 72 hours.

Otherwise, the best rain chances over the next 10 days are seen in the South and Southeast. Temps are variable into the end of March, with a generally cooler than normal bias.

Have a great weekend!

 

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