TFM Midday Update 4-12-2024

CORN

After a soft start to the session, the grain complex is higher at midday. The WASDE report was somewhat bearish but with it over and done with, funds may be covering some of their hefty 250,000 short corn contracts.
December corn dipped below both the 40 and 50-day moving averages after yesterday’s data release. While it has managed to climb back above these levels today, the contract appears to be trading within a relatively narrow range. Any potential upward breakout might need the addition of weather premium.
Yesterday the USDA left the Brazilian corn crop estimate unchanged at 124 mmt and well above CONAB’s estimate of 110.9 mmt.
US corn export demand is strong, with Mexico importing record amounts. This could be tied to drought in Mexico, with the USDA having lowered their corn crop yesterday.

This morning, the USDA reported a large private exporter sale totaling 124,000 mt of soybeans for delivery to unknown destinations during the 23/24 marketing year, which is offering a boost to futures.
Brazilian soybean basis levels reportedly continue to firm up. This is despite the USDA keeping the crop unchanged at 155 mmt yesterday and with 80% of the crop harvested; CONAB’s estimate is 8.5 mmt below the USDA’s.
Aside from the Brazilian production number, CONAB also has soybean exports at 92.2 mmt on their latest estimate. This is well below the USDA’s projection of 103 mmt.
Soybean meal is up sharply at midday, lending a helping hand to soybean futures. This could be tied to a 1.5 mmt reduction in the Argentina crop, according to the Buenos Aires Grain Exchange’s estimate. About 11% of that crop is said to be harvested; Argentina is a major meal exporter.

Paris milling wheat futures are higher this morning by about 3.25 Euros at the time of writing and is providing some support to the US market.
French wheat crop conditions are said to have declined to 64% good to excellent. This is roughly 30% below last year’s levels, and has been tied to weather issues, specifically too much rain in western Europe.
The Black Sea region continues to see conflict. Russia reportedly attacked one of Ukraine’s major power plants near Kyiv which is said to be the main power source for the city. It should be noted that this is a coal powered plant, and not the nuclear plant that was recently in headlines.
The US Dollar Index is also up sharply today, breaching the 106 level. At the time of writing, it is at its highest level since November 2, 2023.

Brandon Doherty