Corn

  • At the Ag Outlook Forum, USDA pegged US corn ending stock estimates at 2.5 billion bushels, down from the November prediction of 2.6 billion. Planted acre expectations were unchanged at 91 million acres, but average yield was high, leading to big production and ending stocks figures. Tones were overall bearish and suggested there is and will continue to be more than enough corn around.
  • The news from the forum didn’t do much to stop the corn market’s slide downward to multi-year lows. The March contract finished the week at $4.1650, down 12.5 cents versus the previous Friday. The bottom line: There’s so much corn out there that the situation doesn’t look likely to change any time soon.
  • Old-crop US corn export sales were at the high end of expectations at 1.3 million metric tons, while 2024-25 crop sales were at the lower end at 2,300 metric tons.

CORN COMMENTARY BY KRISTIN STIEN

  • Corn had another bearish week. All eyes were on the USDA’s Agricultural Outlook Forum. Estimated planted acres for 2024 crop came in at 91 million acres, down slightly from market consensus of 91.8 million. Even so, a 181 bushels per acre yield estimate and a small increase in total demand still leaves the US with burdensome ending stocks estimated at 2.532 billion bushels. If realized, this would translate to a 17.2% stocks-to-use ratio, one of the highest for corn in recent years.
  • Adding to the bearish tone: Brazil’s safrinha crop projection, which rose by 5 million metric tons. Meanwhile, Ukraine’s exports are keeping on track with original estimates. Even with the Chinese New Year’s Lunar holiday, US exports were strong for this week on the 2023-24 crop. However, 2024-25 crop was extremely light in export announcements, likely because buyers are willing to stay patient due to the large carryout outlook.
  • Grain producers are hoping that the market finds support in the nearby market near the critical $4.10-per-bushel area as we near a contract expiration and start to prepare for spring planting. Our eyes will be keyed into how much selling pressure will greet any rallies in the near future.

Soybeans

  • USDA projected US soybean ending stocks at 435 million bushels, far above November’s estimate of 286 million. That, combined with an increase in planted acres expectations and potential for record-high production, should continue to feed the bears in the soybean market.
  • There are plenty of soybeans to fill ho-hum demand, continually lowering the floor on prices. March soybean futures settled at $11.7225 per bushel, down more than 11 cents on the week.
  • Soybean export sales were within expectations, with 353,775 metric tons of 2023-24 crop and 24,000 metric tons of new crop sold.

SOY COMMENTARY BY MEG JOHNSTON

  • Soybean futures continue to churn lower, with March now in the $11.60s, which we haven’t seen since May 2023. The feeling in the market continues to be bearish, and we are seeing that across the futures board for corn and wheat as well as soybeans and their byproducts. It’s pretty hard for the futures markets to run higher when the market expects soybean acres to increase for 2024.
  • The market was tuned into the USDA Ag Forum this week, looking for any indications to turn bullish or stay bearish. The current soybean production estimate is for US farmers to plant 87 million acres, which is in line with what the USDA posted in November. The USDA bumped up ending soybean stocks to 435 million bushels, which just means a lot more beans in the US. Lots of interesting statistics and insight to the US ag industry as a whole came out of the opening notes for Ag Forum, which you can tune into online for free.
  • China is on holiday this week for Lunar New Year, which means buyers there have completely stepped away from purchasing commodities at this time. It is interesting to note that managed funds are sellers right now, with an estimated 144,000 short soybean contracts. That tells us that managed money is definitely on the bearish train.

Wheat

  • Ag Outlook Forum expectations for wheat were mixed, with all wheat acres to drop by about 2.5 million acres to 47 million. However, the call on production is higher at 1.9 billion bushels. If realized this would be the fifth-largest wheat crop on record, largely attributed to continued yield growth.
  • Softness continues in wheat markets, where eyes are watching global production and demand. The nearby contract settled at $5.6050 per bushel, down more than 36 cents on the week.
  • Old-crop wheat export sales reached 349,286 metric tons, at the low end of the predicted range. New-crop sales were at the higher end of expectations at 48,000 metric tons.

WHEAT COMMENTARY BY BRITT O’CONNELL

  • Following USDA’s call for greater production, the wheat market pushed lower with both Kansas City and Minneapolis wheat seeing multi-year lows and Chicago wheat pressing into the lowest price of the 2024 calendar year. Export announcements on the week did not provide any bullish power with 2023-24 commitments coming in at 349,286 metric tons, on the low end of the 300,000 – 550,000 range. With the bulls still searching for headlines to support a move higher, the path of least resistance remains lower.

Futures and options on futures trading involves significant risk and is not suitable for every investor. Information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended for informational purposes. Information is obtained from sources believed reliable but is in no way guaranteed. Opinions, market data and recommendations are subject to change at any time. Past results are not indicative of future results. Jon Spainhour, Kristin Stien and Britt O’Connell maintain financial interest in the commodity contracts mentioned within this research report at the time it is published. Tracy Mobley, Katie Burgess, Mark Majoros and Meg Johnston do not maintain financial interest in the commodity contracts mentioned within this the research report at the time of publication. This report is in the nature of a solicitation.