Ag Market View for Jan 23.24
Prices firmed up late, drawing support for the soybean complex closing steady to $.01 higher. Mch-24 was unable to hold trade above $4.50 in early trade. Next resistance for Mch-24 at last week’s high of $4.60 followed by the 50 day MA at $4.73 ¼. Support is at the contract low of $4.36 ¾. Heavy rains are expected this week along the US Gulf coast and Delta regions cutting into drought conditions. Little moisture is expected in the northern plains and western corn belt where drought conditions will likely to deepen a bit. US corn is priced slightly below Argentine supplies only thru the end of Feb-24. Farm Futures magazine survey of US farmers estimates 2024 corn acres at 92.8 mil., down just over 1.8 mil. from YA and slightly below the S&P Global forecast of 93 mil. acres. EU corn imports thru Jan.19th have reached 9.86 mmt, down 42% from YA. Algeria is seeking 240k mt of SA feed corn in a tender that closes tomorrow.
Soybeans and soybean meal prices pushed into new highs in late day trading. Beans closed $.10 – $.15 higher with spot Mch-24 reaching its highest close in 2 weeks. Next resistance is $12.51 ½. Meal was up $3 – $5 with next resistance for Mch-24 at $373.60. Oil was steady to 5 higher, next resistance for Mch-24 is its 50 day MA, currently 49.80. Little change with the SA forecast. Rains this week in Brazil likely to favor the central and northern growing regions following last week’s rains that were more concentrated in the South. This week’s rains may temporarily delay soybean harvest however will help build moisture reserves for the 2nd corn crop. Argentina is expected to remain dry for the next week to 10 days which will elevate crop stress in central and southern Buenos Aires and La Pampa. Follow up rains will be needed by early Feb-24 to avoid production losses. Spot board crush margins slipped $.03 today to $.85 ¼ and remain historically weak. Farm Futures estimates US soybean acres at 84.95 in 2024, up 1.35 mil. from YA and slightly below the S&P Global forecast of 85.5 mil. acres. China continues to encourage reduced hog capacity after farmers lost nearly $11 per head in 2023. By the end of 2023 China’s hog herd was 434 mil. head, down 4% from the end of 2022. They expect another couple months of reducing herd size will result in supply/demand equilibrium. EU 23/24 soybean imports as of Jan. 19th have reached 6.6 mmt, up 4% from YA. The USDA is currently pegging combined Brazil and Argentine production at a record 207 mmt, well above the previous record of 185.7 mmt 3 years ago.
Prices were mixed with KC holding $.05 – $.10 gains into the close while both Chicago and MGEX closing near unchanged. Next resistance for Mch-24 KC is its 50 day MA at $6.31 ¾. Chicago Mch-24 stalled out after challenging both 50 and 100 day MA resistance in early trade. Mch-24 MGEX failed to hold above $7.00 into the close. Farm Futures survey estimates all US wheat acres at 48 mil. in 2024, down 1.6 mil. from YA. Their winter wheat acres at 37.26 mil. were well above the USDA est. in January at 34.425 mil. FF spring wheat acre forecast at only 9.055 mil. is down 2.15 mil. from YA and well below the S&P Global forecast at 11.1 mil. Some Australian wheat production estimates are creeping up as high as 30 mmt, still well below YA record of 40.6 mmt however well above the current USDA forecast of 25.5 mmt. EU soft wheat exports since Jan. 19th at 17.6 mmt are down 7.6% from YA.
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.