Ag Market View for Jan 17.24


Prices are mostly lower today with beans down $.14 – $.21 with bear spreading noted,  meal was $9 – $12 lower, while oil was up 25 – 45.  Mch-24 beans held support at last week’s low of $12.03 with secondary support at $11.71.  Mch-24 meal had outside day down with next support at $353.  Today’s close was its lowest in 7 months.  Mch-24 oil held above last week’s low at 46.30 before rebounding.  Spot board crush margins were little changed today with oil PV gaining back the 1% it lost yesterday back to 40%.  Weaker than expected economic data from China along with another year of declining population seemed to weigh on commodity valuations.  GDP in China grew only 5.2% in 2023, below expectations for 5.6% growth.  Outside of Covid years this was the slowest growth since 1990.  After not declining since the 1960’s, China’s population fell for a 2nd consecutive year in 2023.  Population declined 2.08 mil. in 2023 to 1.410 bil., double the decline from 2022.  A Brazilian farm group suggested the USDA and Conab production forecasts at 157 and 155 mmt respectively weren’t in touch with reality given what weather has dealt them.  They believe production will be closer to only 135 mmt.  Most private forecasts are falling between 145 – 155 mmt.  A Canadian analytics company using satellite data seem to be falling in line with the farmer group as they suggest yields in Mato Grosso could drop to a 15 year low.  Production est. for Argentina remain on the rise.  Dec. 1st beans stocks at 3.0 bil. bu. were 25 mil. above expectations, however down 21 mil. from YA.  Stocks/1st Qtr. usage however rose to 209%, a 4 year high.  Production among the world’s top 4 exporters at just under 331 mmt was little changed as the lower Brazil production was mostly offset by higher US, Argentina and Paraguay. Stocks/use among the top 4 exports is expected to rebound to 21%, a 5-year high. 

soybean pods


Prices were down $.02- $.03 in choppy 2 sided trade.  After carving out a new contract low at $4.40, Mch-24 traded nearly $.05 higher before drifting back by midsession.  Longer term resistance is at the Jan-24 high of $4.70 ¾.  No export announcements today while the EIA weekly ethanol production report is delayed until tomorrow.  US corn prices are competitively priced below Argentine origin only thru the end of Feb-24.  A Chinese GMO seed manufacturer stated that over the next 3 – 5 years GMO crop penetration could reach 85%.  Most feel it will take much longer however as the Govt. tightly controls the rollout.  Last Friday’s USDA data showed Dec. 1st stocks at 12.169 bil. bu., a 6 year high and up 1.356 bil. from YA.  Dec 1st stocks/ 1st Qtr. usage at 268% was up for the 3rd consecutive year and also a 6 year high.  Production among the world’s top 4 exporters at 602 mmt was little changed from Dec-23 as the lower Brazil production was offset by higher US.  Stocks/use among the top 4 exports is expected to rebound to 12%, also a 6 year high. 


Prices were lower across all three classes in choppy 2 sided trade.  Chicago was $.01 – $.04 lower (Mch-24 up $.00 ½) with bull spreading noted, KC was down $.06 – $.08, while MGEX was $.10 lower.  It was an inside trading day for Mch-24 Chicago.  Mch-24 KC established a fresh contract low.  New contract low for Mch-24 MGEX trading to nearly a 3 year low on the spot weekly chart.  Another dose of frigid temperatures is expected to impact the nation’s midsection by this weekend before significant warming next week.  Yesterday’s wheat purchase by Algeria is believed to have reached 900k mt, above early ideas of 650k – 700k.  Prices were centered around $265.50/mt CF with most originated from France and Black Sea area.  Jordan is believed to have bought 120k mt of optional origin hard milling wheat at $269/mt CF for late March to early April shipment.  Tunisia reportedly bought 150k mt of soft wheat and 50k mt of durum.  Egypt’s GASC bought 360k mt of wheat including 60k from France at $262.50/mt FOB with freight charges bringing to $284.50/mt CF.  300k was from Russia at $265/mt FOB with CF terms ranging from $285 – $286/mt.  Dec 1st stocks at 1.410 bil. bu. 23 mil. above expectations.  Stocks/1st & 2nd Qtr. usage rose to 136%, a 3 year high.  Stocks/use among top exporters is expected to fall to 15%, matching the lowest in a decade.       

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