Ag Market View for Feb 23.24

CORN

Prices were $.04 – $.06 lower today with spot futures closing below $4 for the first time since Nov-2020.  Next support for Mch-24 is $3.93.  Dec-24 has traded to its lowest level since Sept-2021.  Most spreads also weakened to new lows.  Export sales at 32 mil. bu. were at the low end of expectations and a 6 week low.  YTD commitments at 1.458 bil. are up 29% from YA, vs. the USDA forecast of up 26%.  Commitments represent 69% of the USDA forecast, slightly below the historical average of 71.5%.  The BAGE maintained their production forecast at 56.5 mmt, just above the USDA est. of 55 mmt.  The Biden Administration formally approved the sale of E-15 gasoline year round in the states of IL, IA, MN, MO, NE, OH, SD and WI beginning in 2025.  Ukrainian grain exports in Feb-24 have so far reached 4.3 mmt, up from 3.8 mmt YA.  Since July-23 corn exports for 23/24 MY have reached 15.2 mmt.  Prices have now exceeded the bottom end of my downside range for spot futures of $4.00 – $4.25.  Cattle on feed as of Feb 1st was 100% of YA total, in line with expectations.  Placements at 93% were above expectations of 88% while marketing at 100% were also in line with estimates.

QST Corn chart on 2.23.24

SOYBEANS

The soybean complex was lower across the board with beans down $.05 – $.15, meal was $2 – $4 lower, while oil was down 20 – 25.  In addition spreads were extremely weak.  Mch-24 beans slipped to a new contract lows and the lowest spot price since Nov-2020.  New contract low for Mch-24 meal and lowest spot price since Oct-2021.  Next support on the weekly chart is at $323.  New contract low for Mch-24 oil, next support on the weekly chart is at $.41 lb.  Spot board crush margins did rebound a nickel today to $.80 ½ bu.  Heaviest rains in SA in the past 24 hours favored northern Argentina and NE growing areas of Brazil.  Forecasts into early March continue to suggest a good mix of rains and sunshine.  Slight concern for SW Brazil where shower activity is expected to be lighter, however will favor soybean harvest and 2nd corn plantings.   Export sales at only 2 mil. bu. were below expectations and a new MY low.  YTD commitments at 1.428 bil. bu. are down 20% from YA, vs. the USDA forecast of down 14%.  Current commitments represent 83% of the USDA forecast, below the historical average of 87%.  Pace analysis suggests the USDA export forecast at 1.720 bil. bu. is still 25 – 50 mil. bu. too high.  Soybean meal sales at 202k tons were at the low end of expectations.  YTD commitments are up 19% from YA, vs. the USDA forecast of up 4%.  The BAGE reports Argentine soybean conditions held steady at 31% G/E however there was a 2% jump in fair while poor/VP slipped 2% to 17%.  They maintained their production forecast at 52.5 mmt, above the USDA est. of 50 mmt. 

QST Soybeans chart on 2.23.24

WHEAT

Prices were $.05 – $.10 lower across all 3 classes.  Spot Chicago gained $.11 ½ on KC and just over $.26 vs. MGEX this week.  Support for Mch-24 Chicago is at Tuesday’s contract low at $5.55 ¼.  Support for Mch-24 KC is at contract lows at $5.63.  Spreads rebounded a touch today in both CGO and KC.  New contract lows today for MGEX and lowest spot price in nearly 3 years.  Export sales at 10 mil. bu. were below expectations.  YTD commitments at 655 mil. are up 6% from YA, vs. the USDA forecast of down 4.5%.  Commitments represent 90% of the USDA forecast, just above the historical average of 87%.  Current outstanding sales of SRW wheat are 79 mil. bu. with 53 mil. committed to China with another 7 to unknown.  Roughly 2 mil. bu. of SRW was shipped to China last week.  Tunisia reportedly bought 100k mt of optional origin soft wheat paying nearly $239/mt CF.  Since July-23 Ukrainian grain exports have reached 28.2 mmt, down slightly from 30.8 mmt YA.  Wheat has accounted for 11 mmt of this grain.      

QST Wheat chart on 2.23.24

All charts provided by QST

>>See more market commentary here.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now