February 13, 2024
US wheat futures fall to 3-Week low amidst strong global supply and reduced domestic consumption
Wheat
US wheat weekly exports appear to be the lowest in 5 years due to the stronger global supply
- Wheat futures in the US fell to $5.9 per bushel in February, the lowest in three weeks.
- Forecasts suggest stronger global supply and eased US consumption.
- The newest USDA WASDE report revised global wheat production upward for the current marketing year.
- Select Middle Eastern countries saw a 1-million-ton increase in production, easing foreign demand.
- Russia is set to produce 91 million tons of wheat, nearing last year’s record high. Available wheat for export from Russia is expected to reach an all-time high of 51 million tons.
- US demand was revised lower due to decreased food use.
Corn
Weekly US corn exports are on a downward trend and non-commercial short positions are increasing due to potential global supply surplus
- Chicago corn futures stabilized around $4.3 per bushel, nearing a more than-three-year low.
- Heavy rains are forecasted in Argentina, signaling a potential supply surplus.
- High planting rates in Brazil are contributing to pressure on corn prices.
- Brazilian farmers planted 27% of the expected second corn area at a record pace.
- Conab revised Brazil’s corn production estimate down to 113.7 million tons.
- USDA also reduced Brazil’s crop estimates while raising US 2023/24 corn ending stocks to 2.172 billion bushels, surpassing expectations.
Soybeans
Short positions appear to be increasing amid lower export forecasts
- Soybean futures hit a 3-year low, staying under $11.9 per bushel.
- The USDA’s WASDE report heightened concerns about oversupply.
- Global production forecasts for the current marketing year increased, driven by a 1.7 million ton rise in Brazil’s crop.
- Brazil’s high output, rebounding from the prior year’s drought, continued to pressure soybean prices.
- Lower exports from the US raised forecasts for domestic ending stocks.
- China’s (the top soy importer) slow economic recovery and declining pig herd added to price pressure.