Friday, March 15, 2024
Closing Markets: Corn: +3 old & new. Beans: +3 old & +4 new. Wheat: -4.
Market Recap:
Markets finished the week quiet at the CBOT, with little fanfare seen heading into the weekend. This afternoon's COT report showed that like corn, fund managers did not stay with their record short soybean position for very long and were buyers in the latest weekly update.
Products were mixed, May bean meal closed at 334.70, down $2.70/ton, and May bean oil closed at 49.42, up 1.03. Livestock markets were higher to end the week, April live cattle closed at 187.25, up 30 cents, April feeders closed at 252.12, up 95 cents, and April hogs closed at 86.92, up $1.90. Outside markets are mostly lower, crude oil futures are down 10-30 cents/bbl, the Dow Jones index is down 250 points, and the US$ index is up 5points.
Spreads were mixed to end the week, corn spreads were unchanged to a tick firmer, while soybean spreads were up 1/4 to down 3/4. SK/SN made a new contract low on Friday at -14 3/4.
For the week, May corn was down 3 cents, Dec corn was down a penny and 1/4, May soybeans were up 14 1/4, Nov soybeans were up 17 cents, and May Chicago wheat was down 9 1/4.
USDA this morning announced daily export sales of 125,000 mt's of corn for delivery to unknown destinations for delivery in the 2023/24 marketing year.
Markets finished with a lackluster tone on Friday, as neither the bulls or the bears were able to gain much traction. Weather is beginning to be a concern again in South America, but not to the extent that would cause extreme fund short covering. That scenario is likely up to US weather this spring, specifically as it pertains to crop prospects for the 2024 growing season. Planting looks to be ahead of schedule this year, as traders discuss what the record warmth means going forward.
This morning's NOPA crush report came in well above trade expectations, which was a positive for the soybean market. Soybean crush in the month of February was seen at 186.194 mil bu., which was some 9-mil bu. above the average trade guess. This was also a record for February, topping the previous record set in 2020 (the last leap year) by some 20 mil bu. Feb crush was up 0.2% from last month, and up 12.6% from February of 2023. Soy oil stocks also came in well above trade expectations on the report, with stocks as of February 29th seen at 1.690 billion lbs. This was up 12.2% from last month, and some 100 mil lbs more than the average trade guess. However, stocks were also down 6.6% vs last year, and are at the lowest level in nine years for February.
As previously mentioned, today's COT report showed fund managers were buyers in soybeans for the week ending March 12th, having bought 16,862 combined contracts of futures and options. Managed money is now seen short 155,137 contracts. In corn, managed money were buyers of 40,867 contracts, and are now seen short 255,928 contracts. It is likely that funds will continue covering shorts into the end of the month, as traders don't want to be over-exposed to the March stocks and planting intentions reports. Also, of note in today's report, funds were buyers of 29,063 contracts of bean oil, and sellers of 13,331 contracts of wheat.
Other news Friday included an update from the EU on a proposed change to a requirement for farmers to leave land fallow that has been held up by a disagreement on details. The ag minister, on a visit to Warsaw, said the plan, which would see a voluntary fallow land program as opposed to a mandated one, had been held up by a dispute over the timing of certain changes. He also mentioned he expected an announcement sooner rather than later. This policy has been one of the gripes of protesting European farmers.
In Argentina, President Javier Milei's massive 'mega decree' was rejected by the Senate late Thursday, dealing a major blow to the new president's agenda as he attempts to save the country's economy. The bill now heads to the Lower House, where Milei's party also holds a minority. This comes following last month's rejection of a separate reform package by lawmakers. One opposition Senator who voted against the bill said that the reason for his vote was, "very simple: It is unconstitutional."
Weather news remains like recent runs. According to the GFS, Brazil sees rainfall of 2-3" over the next 10 days. Temperatures will run above average, meaning the coming precip is important. Southern Brazil into Argentina sees several strong storm systems into early next week, with localized flooding possible. Otherwise, Argentina remains mostly favorable weather-wise.
US Midwest is still expected to see a slight cool down middle of next week, with another round of storms predicted for the lake states into the Northeast. The two-week forecast shows a chance at above average precipitation for most of the Midwest, which be welcomed by producers in these areas. The southeast also stays wetter than normal, with several strong systems to move from west to east in the next 10 days.
Have a great evening!
Chelsey White
Emery Manager & Originator:: Topflight Grain Cooperative, Inc.
593 Emery Rd :: Maroa, IL 61756
Phone:: 217-794-2240
E-Mail:: cwhite@tfgrain.com
Web:: www.topflightgrain.com
This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any trading strategy, promotional element or quality of service provided by Topflight Grain Cooperative, Inc. Topflight Grain is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable but is not guaranteed as to its accuracy. Contact Topflight Grains designated personnel for specific trading advice to meet your trading preferences. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Topflight Grain Cooperative, Inc.
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