TFM Midday Update 4-24-2024

CORN

With the safrinha corn harvest still about a month away, the forecast of rainfall in Brazil has turned drier and temperatures are above normal. An estimated 67% of that crop is pollinating, so moisture is needed.
December corn futures have strong resistance around the 100-day moving average, which is at the 480 level. Additionally, some technical indicators like daily stochastics are approaching overbought conditions after the recent rally. Both things could limit upside movement for prices.
Later this week, storms are expected to bring 1-3 inches of rain to the majority of the US corn belt. While this may postpone plantings, the benefit to soil and crop conditions will likely outweigh any delay concerns.

Brazilian soybean values are becoming more expensive. Their currency, the Real, is trending higher and basis levels are firming, which may lend some support to the US market.
Despite Argentina’s soybean harvest advancing and the expectation of fresh soybean meal supplies, US soybean meal futures are trading higher for the fourth session in a row.
Lower crude oil and palm oil prices have been weighing on soybean oil futures. However, longer term support may come from the anticipated increase in biodiesel demand.

Both May contracts of Chicago and Kansas City wheat have reached the highest levels since early February. And while the KC contract is currently above its 100-day moving average, the Chicago contract is hitting resistance at that level (around 5.88).
Heat and dryness in southwest Russia are becoming more of a concern for their wheat crop. If this pattern continues through May, it could reduce their production, which could be supportive to US futures.
According to APK Inform, Ukraine has exported 40 mmt of grain as of April 24. This is on par with last year’s 40.7 mt and is impressive considering their logistics issues and destruction of infrastructure.

Brandon Doherty