TFM Midday Update 10-02-2024

CORN

The corn market is trading at the upper end of its nearly 6-cent range with the help of a strong wheat market and higher crude oil.
Monthly ethanol production data released by the USDA for the month of August indicated that 525 million bushels of corn were used for ethanol production, 7% more than in August of 2023.
StoneX released its latest estimates for the US corn crop, putting production at 15.222 billion bushels, with an estimated yield of 184 bpa, up from September’s estimate of 182.9 bpa. For reference the USDA’s current projected yield sits at 183.6 bpa.
Funds were very active in the corn market yesterday, buying a whopping estimated 20,000 corn futures contracts, as they continue to cover their net short positions. At the close of yesterday’s business, they were estimated to be net short 72,000 contracts.

The soybean complex is currently mixed, with soybeans trading lower after giving up overnight gains due to sharply lower soybean meal, as forecasts indicate much-needed rain in Argentina. Meanwhile, bean oil is trading sharply higher, supported by gains in crude oil and Malaysian palm oil.
Monthly crush data released by the USDA showed total August crush at 168 million bushels, 13.3% less than in July, and 0.9% less than the same time last year and in line with expectations. The report also showed year over year crude bean oil stocks declining 10.8%.
StoneX increased its estimate of US soybean production to 4.613 billion bushels, with a yield of 53.5 bpa from 4.575 billion in September.

The wheat complex is currently higher across all three classes, led by the KC contracts, as fresh buyers enter the market. Traders are also likely continuing to cover existing short positions due to concerns that the Middle East conflict is broadening, following yesterday’s Iranian attacks on Israel.
An Australian crop analyst estimates that Australia has lost over 1 million tons of wheat to frost and dry conditions in New South Wales, Victoria, and South Australia, and estimates production could be as low as 27 million metric tons.
North African countries could be increasing their wheat imports from last year by 700k metric tons to 31.9 million metric tons for the 24/25 season, according to world wheat trader Soufflet Group.

Scott Masters