TFM Morning Update 12-04-2024

CORN

Corn futures are trading lower this morning after lower trade yesterday as well. Choppy prices have kept producers hesitant to sell cash which has resulted in stronger basis levels that continue to improve.
Estimates for ethanol production in the weekly EIA report see production lower than the previous week at 1.105 million barrels per day. Stockpiles are estimated at 23.102m bbl compared to 22.869m a week ago.
Pressure in the corn market may come from good South American weather that is expected to remain beneficial over the next 10 days. Export demand is good, but there is a large number of corn bushels sold to China that have not yet been shipped and could be at risk for cancellation.

Soybean futures are trading lower this morning giving back a portion of yesterday’s gains. Soybeans have had difficulty moving higher despite strong export demand and record breaking crush numbers. Both soybean meal and oil are trading lower this morning.
In November, Malaysian palm oil inventories fell by 4.3% to 1.8 million tons, and crude palm oil production fell by 5.6% to 1.7 million tons. This has been supportive to palm oil prices, but soybean oil has been following those moves less closely.
Estimates for Brazilian production are lofty and would be record breaking if realized with Celeres at 170.8 mmt, StoneX at 170 mmt, and AgroConsult increasing its estimate to 172.2 mmt. Brazilian exports are expected to increase by around 4 mmt.

All three wheat classes are trading lower this morning with Chicago wheat leading the way lower. The US dollar is trading slightly higher today which is generally bearish to grain markets.
This morning, Ukrainian President Zelinskyy said that he would be open to accepting a negotiated settlement to end the war in which Ukraine would give up some land in exchange for membership in NATO. This is unlikely to be agreed upon, but could be pressuring prices.
Russia is expected to lower its wheat exports by a larger number than usual as a result of a smaller than expected crop. Officials have approved a wheat export quota of 11 million tons for the second half of the season from Feb 15 to June 30.

Amanda Brill