MarketEdge AM Comments
Feb 15, 2024
(Phil Knuth)
Good Morning. Corn and soybean futures were lower overnight. March corn finished the overnight session off a penny and a half, settling at 4.2275. March soybeans were off 3 ¼ cents, settling at 11.6725. In the outside markets, as of 7:40am: The US Dollar Index is off 200 points, trading at 104.524. March crude oil is off 14 cents, trading at $76.50 per barrel. Precious metals are all higher. Industrial metals are mixed. The Electronic Mini-DJIA is up 53 points, trading at 38,547. Yesterday’s ugly trading session essentially continued overnight. March soybean futures charted a new eight-plus month low overnight and March corn futures matched yesterday’s new contract low. Nearby soybean futures are trading at the lowest level for a lead contract month since 2021. Yield forecasts and preliminary balance sheets for the 2024/25 marketing year released by the USDA Ag Outlook Forum early this morning certainly didn’t help anything. The Ag Outlook Forum’s figures are not survey based and are simply an early “shot in the dark” displaying a “what if” scenario given current economic factors and assumed trendline yields. So, obviously, a lot can and will change with these figures going forward. Nonetheless, the trade cannot ignore these figures and, typically, the yield forecasts released from the Ag Forum are used on official balance sheets from February through August. The USDA Ag Outlook Forum projected a planted corn acreage figure of 91 million acres, a carryout estimate of 2.532 billion bushels, a stocks-to-use ratio of 17.2%, and an average on-farm price of $4.40. The USDA Ag Outlook Forum projected a planted soybean acreage figure of 87.5 million acres, a carryout estimate of 435 million bushels, a stocks-to-use ratio of 9.9%, and an average on-farm price of $11.20. For frame of reference, USDA’s current 2023/24 corn balance sheet shows a carryout projection of 2.172 billion bushels, a stocks-to-use ratio of 14.9%, and an average on-farm price of $4.80. The current 2023/24 soybean balance sheet shows a carryout projection of 315 million bushels, a stocks-to-use ratio of 7.6%, and an average on-farm price of $12.65. The weekly Export Sales Report was also released this morning. Weekly corn sales bookings were solid and weekly soybean sales bookings were less-than-impressive. Last week, 1,306,900MT of corn was booked for sale for the current marketing year. This figure is on the upper end of the range of trade estimates, is 7% higher than the previous week’s sales, and is 13% higher than the prior four-week average. Last week’s corn export shipments totaled 903,300MT. This figure is 15% higher than the previous week’s shipments and is unchanged from the prior four-week average. Primary destinations were Mexico, Japan, Colombia, Saudi Arabia, and Taiwan. Last week, 353,800MT of soybeans were booked for sale for the current marketing year. This figure is on the lower end of the range of trade estimates, is 4% higher than the previous week’s sales, and is 23% lower than the prior four-week average. Last week’s soybean export shipments totaled 1,453,500MT. This figure is 12% lower than the previous week’s shipments and is 8% higher than the prior four-week average. Primary destinations were China, Japan, Spain, the Netherlands, and Mexico. Yesterday, the funds sold 3000 contracts of corn, sold 7000 contracts of soybeans, and sold 5000 contracts of wheat. They are now estimated to be net short 300,680 contracts of corn, net short 136,160 contracts of soybeans, and net short 74,320 contracts of wheat. From a chart perspective, March corn finds initial support at the double-low from overnight and yesterday that is also the contract low, 4.2225, followed by the psychological 4.00 mark. Initial resistance is at 4.25, the overnight high, followed by 4.3475, the high for the week charted on Tuesday, and then 4.37, the double-high charted on Friday and Thursday. March soybeans find initial support at the new eight-plus month low charted overnight, 11.6425, followed by the contract low charted on May 31st, 11.4525. Initial resistance is at 11.7250, the overnight high, followed by the psychological 12.00 level, and then 12.0550, last week’s high charted on Tuesday. Opening calls are lower.
Have a great Thursday.
Good Morning. Corn and soybean futures were lower overnight. March corn finished the overnight session off a penny and a half, settling at 4.2275. March soybeans were off 3 ¼ cents, settling at 11.6725. In the outside markets, as of 7:40am: The US Dollar Index is off 200 points, trading at 104.524. March crude oil is off 14 cents, trading at $76.50 per barrel. Precious metals are all higher. Industrial metals are mixed. The Electronic Mini-DJIA is up 53 points, trading at 38,547. Yesterday’s ugly trading session essentially continued overnight. March soybean futures charted a new eight-plus month low overnight and March corn futures matched yesterday’s new contract low. Nearby soybean futures are trading at the lowest level for a lead contract month since 2021. Yield forecasts and preliminary balance sheets for the 2024/25 marketing year released by the USDA Ag Outlook Forum early this morning certainly didn’t help anything. The Ag Outlook Forum’s figures are not survey based and are simply an early “shot in the dark” displaying a “what if” scenario given current economic factors and assumed trendline yields. So, obviously, a lot can and will change with these figures going forward. Nonetheless, the trade cannot ignore these figures and, typically, the yield forecasts released from the Ag Forum are used on official balance sheets from February through August. The USDA Ag Outlook Forum projected a planted corn acreage figure of 91 million acres, a carryout estimate of 2.532 billion bushels, a stocks-to-use ratio of 17.2%, and an average on-farm price of $4.40. The USDA Ag Outlook Forum projected a planted soybean acreage figure of 87.5 million acres, a carryout estimate of 435 million bushels, a stocks-to-use ratio of 9.9%, and an average on-farm price of $11.20. For frame of reference, USDA’s current 2023/24 corn balance sheet shows a carryout projection of 2.172 billion bushels, a stocks-to-use ratio of 14.9%, and an average on-farm price of $4.80. The current 2023/24 soybean balance sheet shows a carryout projection of 315 million bushels, a stocks-to-use ratio of 7.6%, and an average on-farm price of $12.65. The weekly Export Sales Report was also released this morning. Weekly corn sales bookings were solid and weekly soybean sales bookings were less-than-impressive. Last week, 1,306,900MT of corn was booked for sale for the current marketing year. This figure is on the upper end of the range of trade estimates, is 7% higher than the previous week’s sales, and is 13% higher than the prior four-week average. Last week’s corn export shipments totaled 903,300MT. This figure is 15% higher than the previous week’s shipments and is unchanged from the prior four-week average. Primary destinations were Mexico, Japan, Colombia, Saudi Arabia, and Taiwan. Last week, 353,800MT of soybeans were booked for sale for the current marketing year. This figure is on the lower end of the range of trade estimates, is 4% higher than the previous week’s sales, and is 23% lower than the prior four-week average. Last week’s soybean export shipments totaled 1,453,500MT. This figure is 12% lower than the previous week’s shipments and is 8% higher than the prior four-week average. Primary destinations were China, Japan, Spain, the Netherlands, and Mexico. Yesterday, the funds sold 3000 contracts of corn, sold 7000 contracts of soybeans, and sold 5000 contracts of wheat. They are now estimated to be net short 300,680 contracts of corn, net short 136,160 contracts of soybeans, and net short 74,320 contracts of wheat. From a chart perspective, March corn finds initial support at the double-low from overnight and yesterday that is also the contract low, 4.2225, followed by the psychological 4.00 mark. Initial resistance is at 4.25, the overnight high, followed by 4.3475, the high for the week charted on Tuesday, and then 4.37, the double-high charted on Friday and Thursday. March soybeans find initial support at the new eight-plus month low charted overnight, 11.6425, followed by the contract low charted on May 31st, 11.4525. Initial resistance is at 11.7250, the overnight high, followed by the psychological 12.00 level, and then 12.0550, last week’s high charted on Tuesday. Opening calls are lower.
Have a great Thursday.