On The Money Grain Commentary 2-29-24

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Corn Outlook:

The fundamentals in corn are negative, but the bears have left no room for error if there is a hiccup in weather during the growing season, or an unforeseen geopolitical event arises. This is reflected in the fund’s short position rising to a record 1.710 BB. Meanwhile, the longs of end users have grown to 415 MB, their largest position since December 2005. The bottom line is there could be a backlash against the funds. Meanwhile, exports are not great, but have improved since early February. Last week, inspections were a marketing year high at 48.8 MB, but below the average of 49.3 MB that must be shipped each week to reach USDA’s target of 2.1 BB. The long story short in corn is that we are overpopulated with bears but have a long way to go before the fundamental situation improves.

Bean Outlook

Stocks of soybeans are elevated but, like corn, the bears are leaving little wiggle room in the event of a weather mishap during the growing season, or a geopolitical situation arising. Last week, the funds trimmed their long position slightly, but it remains large at 800 MB. Meanwhile, the long position of end users has grown to 280 MB. This is their largest position since May 2019. Looking at exports, inspections last week were 35.8 MB, and have been on the downswing since early this month. China took 22.0 MB, which was the smallest shipment to them since the first week of February. The bottom line in soybeans is that there may be little reason to be bullish, but the market is overcrowded with bears, and the growing season is just ahead.

Wheat Outlook:

There is not much news in wheat other than exports face intense competition in the global market, and the crop will soon emerge from dormancy. Last week, exports were impressive and a marketing year high of 17.7 MB. However, this is still below the average of 18.6 MB that must be shipped weekly to achieve USDA’s projection of 725 MB. Right now, the chance of meeting their target looks slim.

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