Weekly Market Update 3-21-24

Here is your weekly market update from the Garden City Co-op Grain Origination Team.

Trivia

Answers at the bottom.

Market News

Export Inspections/Sales: U.S. corn export inspections remained strong this week, with a total of 48.8 million bushels, which is right on the high end of trade estimates and consistent with the 5-year average for this week. This is an increase of 45.9 million bushels last week and 40.4 million bushels the same time the previous year. The cumulative inspections have reached 909 million bushels, 217 million bushels ahead of last year’s pace. This is compared to the USDA’s projected 439 million bushels entire year corn export increase. On a seasonal basis, the inspections are on track to meet the current government figure. As for sales, corn was down from the week prior at 46.7 million bushels sold with no added new crop sales still within mid-range of estimates, with Japan, Mexico, and South Korea as top destinations. Wheat bushels were reported to be poor at -4.0 million bushels, tallying in the cancellations; however, 10.5 million bushels for 24/25. Export sales for beans were all in range for the complex 18.2 million bushels, so there was no help nor hindrance from that section. The interesting fact of this move is that the high volume did add OI, so there are not just liquidations taking place. The added OI is minimal, considering the volume. Look for both sides to trade, but shorter covering could give us day 3 of a nice bounce. Milo saw 400,000 bushels sold, with destinations being Japan and China.

Interest rate market update: Holding at 23-year highs, The Federal Open Market Committee (FOMC) has decided to keep the Federal Funds target range unchanged at the current lower and upper bound of 5.25%-5.50%. This marks the fifth consecutive meeting of policy rates to be held at the same level. The Dot Plot showed no change, with three cuts projected for this year. The Fed's estimation of neutral policy rates has increased despite inflation reaccelerating. Markets were expecting a hawkish turn of events, but the message from January remains dovish leaning. Equities found new all-time highs, and yields across the curve bid lower, with SOFR/Fed Fund futures keeping June/July in sight for the first cut.

Corn Planting progress: Winter weather still threatens Northern growers who are eager to start planting. A snowstorm is expected to hit the Northern Plains and upper Midwest on Thursday, with a second storm due to arrive over the weekend into early next week. These storms could delay planting progress, and areas experiencing snow drought this winter could see more snowfall in the next few weeks than they have all winter. While winter weather may slow down planting in the North, USDA meteorologist Brad Rippey says growers in the South have already gotten a significant head start. As of March 17, Texas reported that 34% of corn and 27% of sorghum acreage have already been planted, while Arizona has completed 2% of cotton planting. "For many parts of the country, spring has come early, and we expect planting to be normal or ahead of normal given soil conditions," he says. "But as we focus on some of those northern areas, we expect deteriorating conditions for pre-planting fieldwork due to these late-season snowstorms. Rain is expected here in the South, but planting shouldn’t be delayed. NOAA map shows snowfall from Sept to March.

Weather

 Weather has been mostly dry here in the U.S. Precipitation has started with snow beginning in the north and rain in the south. Substantial precipitation is expected for the next five days in most of the Plains and Corn Belt, with below-normal temperatures until the first week of April. Locally, winds are expected to be 25-30 mph in the next three days; we will see moisture setting in on Monday. Temperatures will range from mid-60s to 70s degrees throughout the weekend, but on Monday, they will drop to 42 degrees, with lows that evening in the teens. However, temperatures will return to 60-70 degrees later this week.
 

Trivia Answers

1.  The Great Wall of China.
2.  The Pacific Ocean.