Grain Comments 02/22/24 7:46:59 AM
February 22, 2024
Good morning. Grains and soybeans are posting small gains as of 6:45 AM, led by wheat. Corn did make yet another contract low during the overnight session but has rallied to the upside since and is currently trading near the session highs. Energy markets are lower this morning – April crude oil is down 11 cents at 77.80. The Dollar Index is 0.227 lower at 103.685. Commodity funds yesterday sold 7000 corn contracts, 8000 soybean contracts and 1000 contracts of wheat in addition to 4000 soymeal and 2500 soyoil contracts. The fund net short corn and soybean positions are approaching record high amounts. The weather outlook for both Argentina and Brazil is generally favorable into early March, but hot/dry conditions during late January and early February in Argentina have caused the Rosario Grains Exchange to lower its estimate of Argentine corn and soybean production. It dropped its corn estimate to 57 mmts from 59 mmts and soybeans from 52 to 49.5 mmts. Brazilian soybean harvest and safrinha corn planting both continue at a faster than average pace. Otherwise fresh market moving news is absent. Some are trying to connect the dots on the abnormally warm Midwest winter and an upcoming hot/dry growing season, but that is purely speculative at this point. Tomorrow is the last trading day for March options. The weekly EIA energy report will be released at 10 AM this morning. Traders expect ethanol production to be lower than that of a week ago with inventories again higher and at the highest level in a year. There’s been a lot of talk recently about corn and soybeans forging a bottom but both markets have continued to drift lower as rallies have been sold. It looks like we’ll trade both sides of yesterday’s closes during today’s session, but traders will be wary of a repeat of yesterday’s late sell-off. Have a good Thursday.