15 February 2024

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  • HEADLINES: Chicago sinks to fresh lows in corn/soybeans on large USDA stocks; NOPA reports record January crush.
  • Chicago grain markets have been mixed through the morning, with large fund selling noted on a lower morning open. Once that buying was filled, Chicago grain markets drifted lower off the highs, leaving corn, wheat, and soybean markets in the red at midday.
  • The soy product markets have been mixed with a burst of fund buying in soybean meal after the morning open, which was accompanied by similar selling in soybean oil. Meal slipped back into the red as the morning progressed, and soybean oil has been negative all morning.
  • The highlight for Thursday’s trade has been the USDA Outlook Forum’s acreage estimates. The USDA’s acreage and balance sheet estimates did not offer any major surprises, but the report release did relieve some of the overhead bearishness that has been in the market in anticipation of the release. NOPA reported a record large January soybean crush rate of 185.8 million bu.

A graph of numbers and a number</p> <p>Description automatically generated with medium confidence” width=”615″ height=”186″ /></p> <ul> <li>Chicago brokers estimate that following a burst of buying at the open, funds have been light sellers of 1,000-2,000 contracts in the corn market, sellers of 2,000-3,000 contracts in wheat market, and have sold 2,000-3,000 contracts of soybeans. In the soy product markets, funds have been sold 2,000-3,000 in soybean meal and 1,000-2,000 contracts of soybean oil.</li> </ul> <ul> <li>The table above highlights the USDA’s best guess at US planting intentions for 2024/25. Total wheat acreage was estimated at 47 million acres, down from 49.6 million in 2023, corn acreage was projected at 91 million acres, down from 94.6 million in 2023, and soybean acreage was projected at 87.5 million acres, up from 83.6 million acres last year. Total acreage for the 3 principal crops of 225.5 million acres was down 2.3 million acres. The USDA estimated an expected corn yield of 181 bushels/acre for corn and a soybean yield of 52 bushels/acre.</li> </ul> <ul> <li>The midday GFS weather forecast maintains good rains for much of the Northern Brazilian crop-growing regions over the next 10 days, which looks to slow harvest. Widespread cumulative precipitation amounts will reach 2-4” across much of the country, with some isolated local forecast totals stretching up to 5-7” in the north. It is the key growing regions of Southern Brazil and Argentina that look to be short on rain into the end of February. Limited rains are forecast in Southern Brazil, while the GFS forecast projects less than 1” for vast areas of the Argentine crop-growing regions. Argentine soybean crop conditions have fallen for 2 consecutive weeks, and a further decline is expected in this afternoon’s update. Crop potential is rolling back amid dry soil moisture.</li> </ul> <ul> <li>The USDA Outlook Forum offered a bearish outlook for the year ahead, with corn stocks rising to 2.5 billion bu, soybean stocks increasing to 435 million bu, and wheat stocks rising to 769 million bu. However, Chicago markets are deeply oversold with record or near-record fund short positions. All bear markets end on large stocks and a major short-covering rally lurks.</li> </ul> </div> </div> </div> </div><!-- .entry-content --> <footer class= This entry was posted in Daily Commentary by simon. Bookmark the permalink.