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Grain Comments: 12-29-2023

Good morning.

Most markets again quiet overnight as we’ve reached the final trading session of 2023. Corn futures are trading 1-2 cents lower, soybean futures are about a penny lower, and the Chicago wheat market is up a penny. Not much is going on in the outside markets either, as crude oil futures are up 30-40 cents, the stock market is unchanged, and the US$ index is down 7 points. What action there is today will likely be position squaring, as traders close the books on 2023 and look ahead to what might be in store for 2024.

German shipping company Hapag-Lloyd announced overnight that they still would not be sending vessels through the Red Sea, as tensions remain high in the area. Maersk, as of Thursday, had resumed sending most of its ships through the waterway.

This morning’s weekly export sales report is expected to show decent tonnages again for corn and soybeans; corn estimates range from 600k-1.4 mil mt’s; soybeans 800k-1.9 mil mt’s; and wheat ranges from 200k-600k mt’s.

Overnight weather forecasts have added additional moisture totals for Brazil next week, as confidence in the coming forecast grows. The models remain in agreement that heat/dryness return in the 10-day period.

Also overnight, the Buenos Aires Grain Exchange released its weekly crop progress update, which showed soybeans in the g/ex category increased to 40% vs 37% last week. Fair went from 60% to 57% and poor was unchanged at 3%. Planting progress reached 78.6% vs 69% last week. Corn g/ex was up 1% to 38%, while like the beans, the fair category decreased 1% to 61%.

There are no Brazilian futures markets today.

Otherwise, fresh fundamental input overnight is lacking. Volume remains subdued and there is a general lack of working orders on either side of the market.

Cash markets will hopefully again start showing signs of life after the first of the year. For the most part, farmers have closed the bin doors and need some sort of incentive (whether it be flat price or basis) to spur additional sales.

Corn futures remain range bound, with March between 4.70 and 4.85. New crop Dec 24 futures are between 5.05 and 5.20 and also have been range bound. Producer is waiting for another push on South American crop decline, and end user is waiting for confirmation that the worst-case scenario has been avoided.

Soybean futures also spent most of last month’s range bound, trading between 13.00 and 13.30. Confirmation of South America’s crop size is needed to provide price direction into Spring.

Wheat futures likely have the strongest fundamental story based on global balance sheets.

Have a great weekend!


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