On The Money Grain Commentary 3-21-24

If you would like to receive our technical comments including price projections and cycle analysis for important tops and bottoms, click on the link at the bottom of the commentary to sign up for a 30-day free trial subscription. Follow Ag Watch Market Advisors on Facebook and Twitter for timely information not posted in our blog

Corn Outlook:

Fund short covering lifted corn this week, but it will continue to face a headwind from ending stocks of 2.1 BB, the third largest in over twenty years, rising world stocks, a record crop in Argentina, and production in Brazil that has been increasing for the past three years. While these issues offer hurdles, there is a bright spot in that exports are showing signs of improvement. Last week, inspections were 48.7 MB which was below the average of 49.6 MB that must be shipped weekly to meet USDA’s target of 2.1 BB. However, the pace has been improving since the third week of January and risen 55 percent. The bottom line is that while the recovery in exports offers a glimmer of optimism, we still have a long way to go for the fundamentals to improve.

Bean Outlook

Fund short covering was the impetus behind the rally in soybeans this week. Otherwise, it is difficult to find much positive news. Expectations are there will be an increase in plantings this spring, global stocks are near a record level, Brazil’s production has risen 20 percent during the past three years, while their exports have grown 25 percent. Meanwhile, U.S. exports have been declining since 2020. Last week, our inspections were 25.2 MB with China taking 20.2 MB. Since last November when our exports peaked, they have fallen 59 percent while shipments to China have declined nearly 66 percent. The bottom line in soybeans is that we are losing business to Brazil, and a hiccup in weather at some point during the growing season may be needed to sustain additional strength.

Wheat Outlook:

Wheat mustered a rebound early this week from reports of Russia launching a drone strike against Ukrainian port facilities. Reports circulated that the E.U. may impose imports on Russian imports. While this offers short-term support, aggression in the Black Sea Region has been the norm the past couple of years. Meanwhile, the U.S. faces stiff competition in the global market. Last week, export inspections were a meager 11.1 MB and below the average of 18.6 MB that must be shipped the rest of the marketing year to reach USDA’s target of 710 MB. Chances are they could lower their projection again in next month’s report.

Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned.