March 25, 2024
Wheat rebounds on Russian concerns, but 2024 prices are down 14%, USDA forecasts surplus; soybean decline indicates volatility.
Wheat
Speculators increase their total short positions for the 4th consecutive week
- Wheat futures rebounded to above $5.4 per bushel from recent lows of $5.2 due to concerns over Russian attacks on Ukrainian ports.
- Prices remain down 14% in 2024 despite the uptick, driven by ample global supply and record harvests.
- USDA forecasts higher wheat production for 2023/2024 in Australia, Russia, and Argentina, with reduced estimates for the EU and Serbia.
- US ending stocks are expected to reach 673 million bushels in June, 18% higher than the previous year, indicating surplus.
- Australia gained competitiveness in pricing while Ukraine exceeded export expectations amid conflict.
- Chinese wheat importers cancel or postpone one million metric tons of Australian wheat purchases, signaling a bearish market.
Corn
Speculators’ positions move in correlation with price of corn contracts
- Chicago corn futures rose to $4.3 per bushel, a monthly high, on prospects of increased demand following hints of interest rate cuts by the Fed and ECB, coupled with softer US economic data.
- USDA’s March report lowered the global corn production forecast to 1,230.2mt, citing output losses from South Africa, Ukraine, Mexico, and Russia. Global demand estimates were raised by 1.5mt to 1,212.2mt.
- Domestic outlook remained unchanged, while large South American supplies continued to weigh on the market.
- Argentina’s scheduled corn exports hit their highest levels in at least five years in early 2024.
Soybeans
Speculators keep decreasing their positions on soybean contracts
- Soybeans have experienced a significant decrease of 106 USD/BU or 8.17% since the beginning of 2024.
- Historically, Soybeans reached an all-time high of 1794.75 in September of 2012, indicating substantial fluctuations in the market over time.
- The current decrease suggests market volatility, and potential factors influencing the decline need to be explored.