Morning Comments 02.12.24

Good morning. Ag markets are mixed/quiet overnight as traders in China and Brazil are on holiday for the week. This has curtailed volume so far to start Monday, and will likely be a theme throughout the week. Corn futures are 1-2 cents higher, soybean futures are 7-8 cents higher, and the Chicago wheat market is down 3-4 cents. Products are mixed, soybean meal is up $4-5/ton, and soybean oil is down 40-50 points. Outside markets are also mostly mixed, crude oil futures are down 80-90 cents/bbl, the stock market is unchanged, and the US$ index is up 5 points.

Today’s Reports: US Weekly Export Inspections

• Corn and soybean futures begin the new week sitting right on price support in both old and new crop. Charts need a fundamental reason to change trend.

• Friday’s COT report showed non-commercial traders were short a combined 244,505 contracts of corn futures/options, which was up 3,236 contracts from last week.

• Non-commercial traders were short a combined 155,559 contracts of soybean futures/options, and 41,598 contracts of wheat futures/options. Soybeans were up 19,649 on the week, while wheat was up 1,971 contracts.

• Non-commercial corn + soybean combined short position, currently near 428,000 contracts, is within spitting distance of all-time record made in 2019.

• Also of note in Friday’s report was that funds bought a net 7,500 contracts of soybean meal, making them buyers for the first time in 11 weeks.

• The USDA’s 100th Annual Ag Outlook Forum will be held Thursday/Friday this week. This will see the release of the first look at 24/25 US balance sheets.

• Most see corn acres below last year and soybean acres above last year; and using trendline yields, this produces ending stocks that are larger than 23/24 for both crops.

• Over the weekend, the Russian Defense Ministry reported that Ukraine had attempted a drone strike on a Russian civilian transport ship in the Black Sea. No damage was reported to the vessel, but tensions continue to escalate in the region.

• Yemen’s Houthi group claimed a fresh attack on a cargo ship in the Red Sea overnight, saying they had hit the ‘Star Iris’. It was unclear how much damage had been done to the ship. The vessel was originally thought to be American, but seems to be Greek-owned.

• US beef production Friday was seen at 520 mil lbs in the week ending Feb 10th, down 3.1% from the previous week. Cattle slaughter was seen down 2.4%, and pork production was down 2.8%. For the year, beef production is down 4.3%, while pork production is 0.1% lower.

• Good rains were seen last and over the weekend in Argentina, while another front is expected to move through the area Monday/Tuesday this week. Forecasts are generally good for Brazil and Argentina over the next 10 days.