TFM Morning Update 07-03-2024

CORN

Corn is trading a little lower this morning as it continues to struggle from a large supply picture with prospects of another large crop.
The corn market continues to balance the bullish pull of a strong basis and slow farmer selling with the bearish influence of large on farm supplies that will likely come to market in the coming weeks.
Later today the EIA will release its weekly ethanol production numbers for the week ending June 28. Analysts estimate production to fall from the previous week to 1.034 million barrels/day, with ethanol stocks falling slightly to 23.348 million barrels.
Managed funds are estimated to have bought 3,000 contracts of corn yesterday, which brings their current position to an estimated 301,000 short contracts.

Soybeans are quietly trading higher this morning along with both meal and oil. While soybeans are higher, they are trading an inside day where they have yet to break out above yesterday’s high.
The US Brazilian Ag Attache lowered its forecast for Brazil’s soybean crop to 150 mmt, which is 3 mmt lower than the current official USDA estimate, yet still above Conab’s 147 mmt projection.
Soybean crush demand has been a bright spot for the soybean market this year with the slow export pace. The USDA reported in the most recent Census crush report that 192 mb of beans were crushed in the month of May, up 3.5% from last year, with soybean oil stocks down 8.4% from a year ago.
The low soybean oil stocks suggest strong soybean oil demand for biodiesel/renewable diesel production. Dec Board crush margins have risen back over a 120 cents/bu, largely on the strength of soybean oil.
It’s estimated that Managed funds bought 3,000 contracts of soybeans in yesterday’s trade, bringing their estimated net short position to 118,000 contracts.

The wheat complex is trading mixed this morning, with Chicago contracts showing strength versus slightly weaker KC and Minneapolis contracts, as the trade continues to balance a tight US SRW supply picture with adequate HRW stocks and the prospect of a big spring wheat crop.
With the ongoing US wheat harvest, farmers remain good sellers, which adds resistance to prices and may keep a lid on rallies.
There is market talk of a smaller French wheat crop with quality issues, but this may be balanced by better crop prospects for Eastern Europe.
Yesterday, Managed funds sold an estimated 4,000 contracts of Chicago wheat, bringing their estimated net short to 69,000 contracts.

Scott Masters