Morning Comments April 12, 2024

Bin sunset harvest

Markets are trading with small gains overnight, recovering a portion of the losses that we saw after the report yesterday.

Managed funds on report day were estimated as net sellers of 7k corn to push the net short to 258k, net sellers of 3k beans to push the net short to 243k, and net sellers of 3k wheat to push the net short to 88k.

USDA made limited changes on the report yesterday, leaving their Brazilian corn and bean production estimates unchanged at 124 mmt and 155 mmt respectively despite most other estimates running well below those numbers.

U.S. corn, bean, and wheat stocks all came in slightly above expectations. Global corn and beans were higher than expected due to the lack of lower revisions to Brazil’s production, and global wheat stocks were smaller than expected on stronger than expected demand.

The Buenos Aires Grains Exchange lowered its corn production forecast by 2.5 mmt to 49.5 mmt (USDA 55), and they lowered their bean forecast by 1.5 mmt to 51 mmt (USDA 50). Insect and disease pressure were reported as the reasons for the smaller crops.

China reported March bean imports of 5.54 mmt, which is down 20% from a year ago and the smallest March total in four years. Poor hog margins have hurt soybean demand. USDA estimated China bean imports for the 2023/24 marketing year at 105 mmt vs. 104.5 mmt LY and 90.3 mmt the year before that.

China reportedly canceled around 300 tmt of corn they had previously booked from Ukraine.

Ukraine's corn planting is underway. The contry's corn area is expected to drop by 4.5% to 3.863m hectares.

Corn posted a bearish outside down day on Thursday, with prices dropping to support near 4.30. Directional and momentum indicators continue to be neutral. Support is near 4.30 and resistance 4.50.

Beans posted lower lows, lower highs, and lower closes after the report, but have recovered all of yesterday’s losses this morning, with the market back within the range that it has been trading at since mid-February. The market is a bit oversold after recent losses. Support is 11.50 and resistance 11.80.

Corn is on track to finish the week with losses as news continues to be slow, and the USDA failed to provide the market with anything to spark significant buying on yesterday’s report. The outlook is little changed, with a range-bound trade expected as we head into the U.S. growing season with funds expected to cover shorts on pull-backs, but sellers expected to emerge if prices approach the 4.50 area old crop and 4.80 new.

Beans are also set to finish the week with losses as global bean demand remains sluggish. With that said, China is likely falling behind on purchases, so look for value buyers to step in on further weakness. Producers can target old and new crop sales near 12.00.

Corn up 1

Beans up 2-3