April 9, 2024
Wheat prices rise amidst global supply concerns while Chinese corn imports dip, impacting US markets.
Wheat
Total long position of speculators increased, driven by weak dollar and supply concerns
- Wheat futures rose over $5.65 per bushel in April, driven by a weakening dollar and supply concerns despite ample global wheat availability.
- Russian grain shipments faced delays due to port clearance issues arising from sanctions, potentially impacting wheat sales from Russia, which had a near-record harvest forecast.
- USDA forecasts projected Russia’s wheat production at 91.5 million tonnes and exports at a record-high 51 million tonnes, contributing to global supply dynamics.
- In the US, total wheat acreage for 2024 is anticipated to decrease by 4% compared to the previous year, with winter wheat planned plantation area falling short of market estimates.
Corn
Accumulated corn exports slightly below the 5-year average
- Chicago corn futures stabilize near $4.3 per bushel amidst considerations of decreased shipments to China impacting supply-demand dynamics.
- China has reduced its corn imports from the US since 2023, turning to Brazilian crops instead.
- Only 157,100 tons of US corn for China awaited shipment as of March 28, the lowest in seven years.
- Robust Chinese harvests may decrease its reliance on external grain sources, with a record 298 million metric tons of corn expected in MY 2023/24.
- Adverse weather conditions in Brazil and a projected 5% drop in total corn acreage for 2024 partially offset the negative trend.
Soybeans
Weekly exports continue to decline; future price has reached a month-low
- Soybean futures hit a month-low at $11.7 per bushel due to reduced US export demand, with sales down 19% compared to last year, while Brazilian shipments increase.
- USDA data revealed lower-than-expected net US export sales at 194,220 metric tons, despite an additional 152,404 tons sold to Mexico, maintaining pressure on prices amidst rising Brazilian shipments.
- USDA’s quarterly grain stocks report indicated a two-year high of 1.845 billion bushels in soybean stocks.
- Ukrainian farmers plan to expand soybean cultivation by 23.5% this year, reaching 2.199 million hectares, potentially impacting global supply dynamics.
- Overall, decreased US export demand, coupled with rising Brazilian shipments and increased Ukrainian cultivation, contribute to pressure on soybean futures prices.