Wednesday March 20, 2024

New crop corn (CZ4) closed yesterday above the 50 day moving average, for the first time since early December
Rain is in the forecast, across the US corn belt
Mexican corn imports are expected to increase 5% year over year to 22 million tons
- increasing demand for starch and animal feed production
- Mexico is the second largest importer of corn, trailing behind China
- 85% of Mexican corn is imported from the US
Informa acres estimates corn down this year 92.8mln vs 94.6 (USDA 2023)
- Soybeans up at 85.9mln vs 83.6 (USDA 2023)
- Wheat down this year at 47.2mln vs 49.6 (USDA 2023)
EU planning to implement tariffs on grain imports from Russia and Belarus
- EU Farmers also demanding that tariffs be re-imposed on agriculture products from Ukraine
- Grain imports from Russia and Belarus are minimal compared to Ukrainian imports
- Tariffs are considered a symbolic move and aren’t expected to impact trade or grain prices
Last year the USDA announced a 1.3 billion Regional Agriculture Promotion Program
- The 5 year program aims to assist the industry in expanding and diversifying new global markets for US crops
  - Russia is the global leader in wheat exports
  - Brazil leading in soybean and corn exports, surpassing the US
Old crop and new crop corn spread (CU/CZ)
- Trading around a 12 cent carry at the moment
- If a good corn crop is planted (92+ million acres) and develops as planned, the spread between old and new crop should widen
- Weather problems this summer or the short funds decide to cover their positions could potentially invert old crop to new crop