Corn

  • March corn finished the week at $3.9975 per bushel, down almost 17 cents versus the Friday before. Funds continued to add short positions at a steady pace across the grain complex, with the latest CFTC Commitment of Traders report showing managed money net short 300,000 corn contracts — 293,678 to be exact — as of February 6. That is their biggest net short position since June 2020.
  • Momentum traders are selling into any rallies. It’s a standoff. Who will blink first? Farmers who have bills to pay will soon be faced with selling their crops. The funds are holding their stare waiting for the right time to get out of their near-record short positions.
  • US corn exports are 32% higher than the same time a year ago. For the week ending February 15, US old-crop corn export sales were at the low end of predictions at 820,419 metric tons. But 2024-25 crop sales were far above expectations, with 177,705 metric tons sold.
  • Planting weather is on the minds of many. Early forecasts call for above-normal temperatures and dry conditions for April, May and June.
  • For the week ending February 16, ethanol production averaged 1.084 million barrels, a new high for this week of the year. The previous high was 1.068 million barrels per day in 2018. This week’s total was up 0.1% from last week and up 5.3% from last year. Ethanol production for the week was 7.588 million barrels. Stocks were 25.502 million barrels. This was down 1.2% from last week and down 0.3% from last year. Rising crude oil values and gasoline prices are both indicative of potential stronger demand for ethanol in the near term.

CORN COMMENTARY BY JENNI BIRKER

  • December corn posted some gains following the Monday holiday, but the small rally was short-lived. The market gave back all of Tuesday’s gains in Wednesday’s trading session and ultimately ended the week down.
  • After last week’s multiple headlines, the market didn’t have much news to trade this week. Predictions are for continued dry conditions across the Midwest for the spring, which, if true, will be friendly to early planting. Low market volatility, lack of significant exports and USDA projections of big carry out numbers are all adding fuel to the lower price story.
  • On the upside, US Secretary of Agriculture Tom Vilsack is working to push tax incentives for ethanol producers, which would encourage buying of corn to boost production of a more climate-friendly airplane fuel.
  • Brazil also cut its corn output estimate to 125.9 million metric tons, down from the previous call 129.2 million.

Soybeans

  • March soybean futures settled at $11.3300 per bushel, more than 39 cents lower on the week.
  • Old-crop soybean export sales totaled 55,919 metric tons, far below predictions. There were no new-crop sales. So far in 2024, US soybean exports are running 23% below a year ago.
  • US soybean crush margins are declining. Argentina’s soymeal is the cheapest at the port compared with the US and Brazil. Meanwhile, soybean harvest in Brazil is moving at an above-average pace, with 35-40% complete.
  • Mato Grosso, Brazil’s biggest soybean region, was around 60% complete as of Monday. There’s still work to do in the south, where things are 10%-15% complete. Some anecdotal reports say yields in the area are below average. Other observers say that things are better in different parts of Brazil.
  • Brazil’s Minister of Agriculture Undersecretary Neri Geller sees total output at 145-149 million metric tons, compared to about 156 million last year. USDA’s last call: 156 million metric tons.

SOY COMMENTARY BY VERL PRATHER

  • Soybean futures kicked off the shortened week in exciting fashion, gapping higher at the open on Monday night. Unfortunately for soybean bulls and producers, the move higher was short-lived. By the end of trade on Wednesday, soybeans gave up all of the futures gain and more.
  • While analysts continue to volley estimates on the size of Brazilian soybean production, the market is struggling to find any hint of support. This week, March soybeans broke below the psychological $11.50-per-bushel level. South American weather as of late has not been extremely newsworthy. However, confidence continues to grow in the idea that the combined production of both Brazil and Argentina still has the ability to be at record high levels.
  • Soybean meal values continue to lead the complex lower as nearby prices have declined more than 9% within the month of February. As crush facilities continue to come online within the US, a glut of soybean meal is being produced and looking for an owner. In the meantime, soybean crush margins have also been under pressure.
  • Regardless of the price point, producers appear eager to get a jump start on spring field work and take advantage of warm temperatures. Traveling around within Central Illinois, planters were being prepped for the season and I even spotted one introducing some of the first seed beans to the soil.

Wheat

  • Nearby wheat finished Friday at $5.7350 per bushel, up 13 cents week-over-week. News out of Europe is mixed, with Russia’s wheat export prices at the lowest level since 2020 and farmer protests continuing across the continent.
  • US wheat exports are running 18% below year-ago levels. For perspective, US wheat prices at the port are $2.53. Weekly z2023-24 crop export sales fell short of expectations at 233,521 metric tons. But new-crop sales of 46,612 metric tons were at the high end of the predicted range.

WHEAT COMMENTARY BY JEN WACKERSHAUSER

  • Wheat markets found a bit of life this week, but still failed to move above old resistance points at $6.00 per bushel in Chicago and Kansas City. After breaking out of a relatively sideways market Monday, we gained it all back to revert to our old range of $5.80-6.00 per bushel Chicago wheat. We have not seen a lot of new information to push this market. European wheat prices are at a three-year low and Russian wheat prices are also weak, which will squash any significant move higher. Fund short covering and technical trading in the recent range seems to be the driving force.
  • Longer term, wheat markets may keep a close eye on spring weather moving into the plains to see how winter wheat is emerging out of dormancy and what kind of seasonal weather we are seeing in Ukraine and Russia. We continue to see push back from Ukrainian neighbors who are growing tired of paying a higher price for Ukrainian grains at the detriment of local farm prices and have missed some opportunities in the last couple of years to cash in on the tighter markets. Global economic slowdowns will also pressure strong rallies in wheat. Many countries will have to ration purchases if a stronger price returns. Look to a continuation of range-bound trading until we see more crop reports from the US, Russia and Ukraine.

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, Jenni Birker and Jen Wackershauser maintain financial interest in the commodity contracts mentioned within this research report at the time it is published. Katie Burgess, Erica Maedke, John Billington and Verl Prather 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.