TFM Morning Update 04-22-2024

CORN

Corn is trading slightly lower this morning after Friday’s rally which brought prices back within the previous trading range just below the 40-day moving average. Friday’s gains were largely due to higher energy prices and the EPA’s decision to allow E-15 this summer.
In Brazil, the recent weather has been beneficial to the second crop corn. Producers already are holding onto bushels from last year so the prospect of another large crop has pressured prices within the country.
Friday’s CFTC report showed that funds were sellers last week of 16,016 contracts of corn which increased their net short position to 279,570 contracts. Funds are now the most short across the agriculture complex in 4.5 years.

Soybeans are trading lower this morning, but Friday’s rally of over 16 cents was encouraging. July soybeans still lost 21 cents on the week, however. Soybean meal is lower and dragging soybeans down this morning while soybean oil is trading higher along with palm oil.
Chinese imports of soybeans from the US have cut in half for the month of March as they ramp up their purchases of cheaper Brazilian soybeans. The recent dollar valuation against the Real has made Brazilian offers more attractive.
As of April 16, funds reportedly sold 28,565 contracts of soybeans which increased their net short position to 167,875 contracts. This puts funds near their record short position but also puts funds in a position to short cover if fundamentals become more bullish.

Despite both corn and soybeans trading lower this morning, all three classes of wheat are trading higher due to weather concerns in many wheat growing areas. KC wheat is leading the way higher followed by Chicago wheat.
SovEcon has cut its estimate for the 2024 Russian wheat crop by 1 mmt to 93 mmt. They are expecting hot and dry weather to effect yields with growing areas only receiving between 40 and 80% of their normal precipitation levels.
Friday’s CFTC report showed funds as sellers of wheat by 9,935 contracts which increased their net short position to 96,403 contracts. Funds have not held a net long position in wheat since 2022.

Amanda Brill