CONAB has estimated Brazilian corn production at 112.8 mmt, which is down about 1 mmt from last month, and significantly below the USDA at 124 mmt.
Conditions in Argentina look mostly favorable – heavy rains are expected this week in the eastern and central parts of the country that could create localized flooding, however. Argentina is in the beginning stages of harvesting what appears to be a record corn crop.
Early corn planting in the southern US is running behind last year’s pace but is more in line with historical averages. Texas is 22% planted versus 27% at this time a year ago, while Louisiana is 17% complete compared with 62% last year.
CPI data released this morning indicated that inflation rose again in February. Expectations were for a year over year increase of 3.1%, but it was slightly higher at 3.2%. Additionally, for the month of February itself, CPI was up 0.4% versus expectations of 0.3%. All of this indicates that the Federal Reserve may continue to wait to lower interest rates.
CONAB has estimated Brazilian soybean production at 146.9 mm, which is down roughly 2.5 mmt from last month, and is well below the USDA at 155 mmt.
Brazilian soybean harvest was about 55% complete as of last week, and good progress should be made with dry conditions this week across the western and central areas. Expectations are for well over 60% completion this week.
Palm oil futures have reached the highest levels since April of last year due to increased demand as well as production issues. This has soybean oil working its way higher, which is giving a boost to soybean futures.
Farmers in Brazil are said to have sold about 37% of their expected soybean production, according to Safras & Mercado. However, this is down from the average of around 50% for this time frame. With their basis also improving, this potentially indicates that the crop is lower than what the USDA is saying, and perhaps closer to the CONAB number.
Chicago wheat futures posted a bullish key reversal on charts at yesterday’s close. Futures are following through this morning by trading higher. This may indicate that a bottom is in place, at least for the meantime, especially as the positive trade seems to disregard the recent Chinese cancellations.
Winter wheat condition in Kansas and Oklahoma was unchanged on the latest update, however in Texas the crop declined 2% to 44% good to excellent.
Ukraine officials have said that their 2024 harvest of grain and oilseeds could be down 8% compared with last year, at 76 mmt. This is attributed to lower acreage, higher costs, and labor shortages. Wheat in particular could be down 14.5% at 20 mmt.
Russia continues to act as an anchor on the wheat market in general, which may limit upside potential. According to Sov Econ, Russia’s April FOB export values have fallen to $198 per mt. This keeps US exports uncompetitive, as they are well above this level.
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