S. America’s Crops Likely Lower, Will US Stocks Be Lower?

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Market Analysis:

The USDA’s next US & World supply/demand & S. American crop updates will be on March 8. The World Board usually makes minimal changes in their US & World estimates this month. They prefer to see important US quarterly stocks & processing reports before making big domestic adjustments. However, this year’s erratic Brazilian growing season which has experienced dryness that delayed seeding, prompted replanting & even switched producers’ plantings (corn to cotton) suggests further bean & corn crop declines. The trade remains optimistic about Argentina’s 2024 crop prospects because of timely weather. However, a nasty heat stretch reportedly sliced 100,000 hectares of soybean area suggesting no change in Argentina’s crops this month.

Ongoing 8-15% lower bean yield reports in the Center-West region have us expecting a 5 mmt decline in Brazil’s 2024 bean crop to 151 mmt vs the trade’s 152.3 mmt average estimate. After 4 monthly crushing records, January’s 194.8 million bu pace just missed another one by 1.7 million. Strong competition from Brazil as their harvest is near- ing 50% has slipped US export sales the past few weeks.

However, beans overseas demand maybe left unchanged to see the impact of a smaller Brazilian crop. Overall, the US soybean stocks maybe unchanged at 315 million bu.

Brazil’s corn output has also been impacted by this year’s erratic weather. After a 3 mmt decline last month, Brazil’s could drop another 4 mmt to 120 mmt because of late 1st crop plantings and switches to other crops on their 2nd crop plantings. 20-25% of Brazil’s 2 crop corn will be planted after its March 1 preferred date making it vulnerable to late season stress. Despite January’s cold snap cutting etha- nol’s corn usage by 50 million bu, this domestic demand is 115 million bu stronger than last year. Seasonally, exports are 250 million bu higher than last year. Overall, no chang- es in corn’s balance sheet are expected.

US wheat export shipments are a bit slow, but seasonally, export sales at on target. No US stock change is expected. The Black Sea & India will be the wheat’s focus this spring.

What’s Ahead:

S America & the USDA’s March World crop & Supply/Demand reports will be the near-term price factors. Use May soybeans & corn prices in the $12.10-.35 & $4.45-52 ranges to have 65% and 55% of your old-crop priced. Also, begin your 2024 corn & soybean sales at 15% in the $4.70-$4.80 and $11.85-11.95 new-crop ranges. Also, up your May KC wheat marketing to 65% in the $6.10-25 range.

More By This Author:

Despite Small Crop Changes, S. America’s Weather Is The Focus
South America’s Crop Updates Are The Market’s Focus
Weekly U.S. Ethanol Production Plunge Last Week

Disclaimer: The information contained in this report reflects the opinion of the author and should not be interpreted in any way to represent the thoughts of any futures brokerage firm or its ...

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