Corn is trading slightly lower today after yesterday’s move lower with little fresh news apart from crop scouts and analysts adjusting their expectations for South American corn production lower. The Rosario Board of Trade reduced its forecast for Argentinian corn by 5% to 49.5 mmt.
While futures have recovered slightly from the overnight trade, they made new contract lows overnight and continue to grind lower. Pressure has come from cheap Ukrainian corn offers that are reportedly as much as 60 cents under US offers.
Estimates ahead of the weekly EIA report for the week ending February 16 see production lower than the previous week at 1.079 million barrels per day and the stockpile estimate increasing to 25.982m bbl which would be the highest level since March of last year.
Soybeans are trading lower today, falling to the lowest level since June as non-commercials continue to add to their short position, bringing it to a new record short of 162,000 contracts. Soybean meal is trading lower while soybean oil is higher along with palm oil.
South American weather remains favorable, but analysts are still mixed about the size of production. The Brazilian soybean harvest is now 33% complete, but estimates range from as low as 145 mmt to as high as the USDA’s estimate of 156 mmt.
Soybean oil could be the bullish component in the soy complex as the outlook for renewable diesel capacity is encouraging and expected to increase by another 1.4 mmt.
All three wheat classes are trading higher today with KC wheat posting the most gains. There has been little bullish news for wheat, so the move appears technical with futures having been very oversold which likely triggered short covering.
Some support may be coming from the current administrations plans to sanction Russia which could be announced as soon as tomorrow, but there is still pressure from the cheap Ukrainian wheat that is being offered to compete with Russia’s low prices.
Russia’s agricultural minister has reported that Moscow has now shipped 200,000 tonnes of free grain to six African countries fulfilling the countries pledge that was made last year by Putin.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
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