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The freefall continued today for corn and soybeans, with wheat eking out a neutral day. We had said yesterday that if wheat can manage to string together a few positive closes in a row, that is supportive technically.... I am not sure what unchanged means, but at least it is not negative.
March corn had a 11 1/4 cent range today, wheat had a 20 1/4 cent range today, and soybeans had a 20 1/2 cent move today. CBOT corn is flirting with sub-$4/bu today as it closed at another low. Today's low ($4.04-1/4) is the front-month contract's lowest since Nov. 13, 2020. But that 11/13/20 price is more like $4.80 in today's dollars, considering inflation. Soybean spot futures also traded to fresh three-year lows today, continuing the slide as farmer sales remain very slow. It's likely that prices are near a low from both a price perspective and also from a timing perspective as we head towards the spring planting season, but it doesn't feel good whichever way you frame it.
The U.S. government officially announced the approval of year-round E15 sales, though only starting in 2025— one month later than proposed. Today's EIA report showed that Ethanol stocks slipped to 25.5 million barrels in the week ending February 16, down from 25.8 million the previous week, and slightly below the 25.6 million barrels on hands a year ago. Ethanol production rose to 1,084K barrels per day in the week ending February 16, up from 1,083K the previous week, and up from 1,029K bpd in the same week last year. The production of ethanol utilized an estimated 109.5 million bushels of corn in the week ending Feb. 16, up from 109.4 million the previous week, and up from 101.2 million bushels in the same week last year. Estimated marketing year to date corn use for ethanol totals 2.518 billion bushels, up 126 million or 5.3% from the previous year's pace, and more than 80 million bushels above the seasonal pace needed to hit USDA's target for the year. Cheap corn buys demand.
Managed money net short positions are approaching record territory in the grain and oilseed complex, despite geopolitical risks. Both Russia and Ukraine are dumping as much grain on the world market as they can, at whatever price it takes to move the grain. Funds were thought to have been mainly sellers again today, further extending that position. The farmer is undersold relative to normal for both corn and soybeans in both Brazil and in the United States. Good data doesn't exist for the United States, but Brazil farmer selling is at its lowest level of the past five or six years for both corn and soybeans, meaning that farmers on both sides of the equator are searching for a flat price rally to move grain, but they're not getting it
This morning, private exporters reported sales of 126,000 metric tons of sorghum for delivery to China during the 2023/2024 marketing year.
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