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Grain Comments: 04-24-2024

Good morning.

Chicago wheat futures opened a penny lower last night and are taking a bit of a breather to this point in the overnight trade, while corn and soybeans trade either side of unchanged. Moving average resistance will be seen Tuesday in the form of the 100-day in Chi wheat futures, and in the form of the 20/50 day in the soybeans. Corn futures remain around 10 cents below their 100-day moving average, but this will be the next upside target here as well. Corn futures are trading unchanged to a penny lower, soybean futures are trading 2-3 cents lower, and the Chicago wheat market is down 5-6 cents. Products are mixed, soybean meal is up 50 cents/ton, and soybean oil is trading 20-30 points lower. Outside markets are also mixed, crude oil futures are around 50 cents/bbl lower, the Dow Jones index is unchanged, and the US$ index is up 20 points.

According to Conab, grain shipments via waterway in the country are up 780% since 2010. The agency said Brazil has 253 private use terminals, with another 247 terminals available for public use in a report on Tuesday.

Brazil is expected to produce 88.3 mmt’s of animal feed in 2024 according to industry group Sindiracoes. This figure would be up 2.4% from last year, but slightly below the group’s previous estimate of 89 mmt’s. Of this total, corn accounts for roughly 60%, while soybean meal accounts for roughly 21%.

Mexican Economy Minister Raquel Buenrostro on Tuesday said a resolution over the GM corn dispute is expected by September of this year. Mexican corn imports from the US currently sit at record levels for the 2023/24 crop year, but the 2024/25 book of business is average, likely awaiting a ruling on the dispute.

It is worth noting that the decree from Mexico does allow the use of GM corn in animal feed, which is where the majority of Mexico’s corn imports go. The US started the dispute over a planned ban by Mexico of GM corn imports for use in dough and tortillas, claiming it was not based in science.

This morning’s weekly Ethanol production report is expected to show daily production in a range of 0.903-1.03 mil bbls; at the low end, this would be the second lowest reading of both the marketing year and the calendar year. Stocks are seen between 25.3 and 26.0 mil bbls.

The US Senate resoundingly passed a $95 billion emergency aid bill late Tuesday, with the bill now set to reach President Biden’s desk on Wednesday. The bill provides support for not only Ukraine, but also Israel and Taiwan. Russia threatened to increase infrastructure attacks in Ukraine following the Bill’s passage.

Financial markets look to be mostly quiet again Wednesday ahead of tomorrow morning’s key GDP number, as well as weekly jobless numbers. Data out today will include March Durable Goods Orders, which economists see coming in at around a 2.5% increase, compared with a 1.3% increase last month.

Good rains were seen yesterday in parts of Missouri, Illinois and Indiana according to satellite data, with totals of 0.1″ to 1″ for a good chunk of these states. This system exits the NE by Wednesday night, while the rest of the corn belt looks to be mostly dry today.

Models do see another pair of systems making their way through the area starting on Friday and lasting into the middle of next week, with the agreement that the best totals will be seen in MO/AR/OK. These storms will bring possible severe weather, with high winds and heavy rainfall forecasted.

Otherwise, not a lot of change from yesterday’s runs. Temps are seen slightly cooler into Friday before warming over the weekend and into next week. Long range guidance continues to indicate a shift to warmer/dryer weather for the Eastern Midwest into the middle of May.

No change again for South American weather; as has been mentioned, monsoonal rains are retreating for the season, with the majority of Brazil hot and dry over the next 10 days. Heavy rains are still seen in a small pocket in the far SE into Argentina. Of note, it is estimated that some 67% of the safrinha corn crop is still either in pollination, or not to this stage yet.

Have a great day!

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