Written Commentary
Global Ag News for Mar 25.24
March 25, 2024
SOYBEANS
Soybeans traded higher. Market may have taken a rest after Thursdays higher and volatile trade. Most feel market is finally trading tight US 2020/21 soybean balance sheet. There is also concern that US 2021 soybean acres and yield may not be enough to satisfy demand. The billion dollar question is when do end users and speculators buy the grains? Some focus has been turned to SX. Some look for key support near 13.00. Still US domestic cash basis levels remain firm despite Thursdays rally. This suggest SN may not be high enough to ration demand. US domestic soybean crush remains positive and crushers are bidding for ownership. USDA is too low on their estimate of total US 2020/21 soybean demand. China hog production numbers are up which should support soybean and soymeal prices. Finally, our weather guy is convinced a ridge of high pressure will develop in US NW Midwest, north plains and south Canada prairies this summer. He is also now concerned the ridge could develop as soon as mid-May. That is not bearish prices.
CORN
Corn futures were mixed. Managed funds may have taken the day off after being massive buyers Thursday. Nearby May contract may have been supported by option expiration and liquidation of May open interest. US domestic cash basis remains firm as end users bid for summer supplies. Fact USDA finally reported new crop US corn sales to China offered support. The billion dollar question is when do end users and speculators buy the grains? Some focus has been turned to CZ. Some look for key support near 5.30. Still US domestic cash basis levels remain firm despite Thursdays rally. This suggest CN may not be high enough to ration demand. USDA is too low on their estimate of total US 2020/21 corn demand. Finally, our weather guy is convinced a ridge of high pressure will develop in US NW Midwest, north plains and south Canada prairies this summer. He is also now concerned the ridge could develop as soon as mid-May. That is not bearish prices. Argentina corn harvest is 17 pct done vs 35 last year. Crop is estimated near 46 mmt vs USDA 47. Brazil weather remains dry for next 10-14 days. This will increase chances for lower corn crop. Matif corn futures are near 8 year highs. Trade looks for US corn planting pace near normal and at 18 pct.
WHEAT
Wheat trade was mixed. For the week. Wheat prices rallied and followed corn prices. Managed funds were active buyers. There is also growing concern about US, EU and Black Sea 2021 weather/crops. Like corn and soybeans. Matif wheat futures traded to new highs. USDA est World 2020/21 wheat crop near 776 mmt vs 763 last year. Domestic use is est near 781 mmt vs 747 last year. Feed use is a record 156 mmt vs 139 last year. Final feed use could be even higher. China is est near 40 mmt vs 19 last year. World traded is est near a record 199 mmt vs 191 last year. Russia 39.5 versus 34.4 last year. EU 27.5 vs 38.4 last year. Canada 27 vs 24 last year. Australia 22 vs 9 last year. US 26.8 vs 26.2 last year. World end stocks less China is 150 vs 148 last year. Major exporters end stocks 35.4 mmt vs 32.6 last year.
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