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Grain Comments: 03-27-2024

Good morning.

Ag markets started lower in the overnight and have been there ever since. The high on May beans is down 2 cents as of this writing, while the high on May corn is down a quarter of a cent. Wednesday looks to be another choppy day, as traders’ position for tomorrow’s number without a whole lot of market-moving news in the meantime. Corn futures are trading 4-5 cents lower, soybean futures are trading 3-6 cents lower, and the Chicago wheat market is down 2-3 cents. Products are lower, soybean meal is down around 50 cents/ton, while soybean oil is trading 50-60 points lower. Outside markets are mixed, crude oil futures are down 30-40 cents/bbl, the Dow Jones index is up 150 points, and the US$ index is unchanged. Also of note, May cocoa gaped to new highs to start Tuesday’s trade, before filling that gap and closing lower on the day.

Today’s weekly ethanol production report is expected to be the main news story in the corn market on Wednesday; traders look for daily production in a range of 1.010 to 1.056 mil bbls, and stocks in a range of 25.909 to 26.2 mil bbls.

For Thursday’s report, it is worth noting on the acreage side that in 2023, USDA was 2.6 mil acres too low on corn acres and 3.9 mil acres too high on soybeans, meaning what they say tomorrow is not the end-all-be-all on US 2024 acreage.

Another big question for Thursday is that if stocks do come in higher as the trade is expecting, how much of that has been priced in, and might we see a sell the rumor, buy the fact type of trade tomorrow?

Technically, corn futures traded below their 20-day moving average support last night for the first time since the first week of the month. Soybeans are trading right at support.

Cattle futures traded to sharp losses on Tuesday as the USDA confirmed several cases of HPAI, the most virulent strain of bird flu, had been found in multiple Plains dairy cattle herds.

Officials say milk is still safe for intake, but the situation will need monitoring. There is also concern over the virus possibly spreading North to the beef cattle herd, as more wild birds migrate back North for the season.

In a weekly update, Brazilian agribusiness ANEC said they see soy exports out of the country reaching 13.49 mmt’s in March, down from last week’s estimate of 14.01 mmt’s.

Same group sees Brazilian corn exports for March at 140,556 mt’s (up from 134,430 previously), and soybean meal exports for March at 1.9 mmt’s (down from 2.13 previously).

Crude oil futures traded lower on Tuesday following a surprise stock build; API energy stocks showed nationwide crude oil inventories were up 9.3 mil bbls last week.

Fallout from the Baltimore bridge situation seems to most effect coal exports and imports of European autos. The Baltimore port processed as much as 2.5 mil tons of coal per day.

Officials did state they thought traffic would be able to reroute to New Jersey or Virginia, but disruptions and logistical snarls would be seen, nonetheless.

Overnight weather is mostly unchanged for South America; Southern Brazil into Argentina is slightly drier over the next two weeks, otherwise forecast is the same.

A strong storm system exited the US Midwest on Wednesday after bringing good rainfall to parts of Iowa, Minnesota and Wisconsin. This has been the epicenter of Midwest drought since the first of the year, so moisture was welcome.

The forecast remains active with another chance of storms/rainfall early next week. Temps are seen on the cooler side through the first 10 days of April.

Lastly as a friendly reminder, tomorrow will be the last trade day of the week for ag markets as there is no trade Friday for the Good Friday holiday.

Have a great day!

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