Written Commentary
Ag Market View for July 26.24
July 26, 2024
SOYBEANS
Soybeans, soymeal and soyoil ended lower. Dalian soybean, soymeal and soyoil prices were lower. Malaysian palmoil futures were also lower. Concern about China soybean import demand and Asian vegoil demand is offering resistance. China hog futures are lower. There is concern about food demand due to travel restrictions and lockdowns due to virus spread. China feed and crush margins are also lower. There is talk US 20/21 soybean carryout could increase due to lower crush. There is also talk US 21/22 soybean demand could drop due to increase competition from Brazil and lower China imports. Weekly US soybean export sales are est near 1,000-1,800 mt vs 1,120 last week. Pro Farmer tour so far is finding soybean pod count that could support USDA August soybean yield estimate. Soybean bulls need addition demand or lower supply to test key resistance. SX support 13.40. Resistance 13.65.
CORN
Corn futures ended higher in a narrow range and on reduced volume. Approaching US harvest and slow new crop US export demand offers resistance. Fact USDA dropped US 2021 corn yield more than expected and so far Pro Farmer tour is not finding corn yields above USDA guess offers support. Overall dry weather over the next 2 weeks across US central Midwest and Russia is also offering support. Most in trade feel that Brazil corn crop supplies are down and World export needs should increase US demand. Some still feel US 21/22 corn exports could increase 200-300 mil bu. Weekly US corn export sales are estimated near 200-900 mt versus 978 last week. Trade still looking for US 21/22 corn feed use near 5,700 vs 5,075 this year, ethanol use 5,250 vs 5,075 this year and exports near 2,800 vs 2,775 this year. This would suggest an US 21/22 carryout near 850 vs USDA 1,242. This assume a 2021 corn yield near 174.6. Pro Farmer tour so far is finding corn yields that could support USDA August corn yield estimate. Key will be IL, IA and MN results. Some feel wet spring and recent losses to wind damage could lower IL final corn yield and dry weather could lower IA and MN yield from USDA August estimate. Weekly US ethanol production was down from last week but up from last year. Stocks were also down from last week and up from last year. Margins remain negative. US July cattle on fed is est near 98 pct, placements 93 and marketings 96. Cattle futures testing recent highs. Oct hogs in range between gaps at 87.25 and 89.70. CZ near initial support near 5.60. Key support 5.50. Resistance 5.80. US Farmer was a big seller above 5.90 USDA report high.
WHEAT
Wheat futures ended slightly higher. Word that lower Russia crop could trigger Russia to restrict exports offered support. Fact that Egypt bought Romanian and Ukraine wheat near $294-$296 versus last tender price near $261 also offered support. Virus spread in US and Asia though is raising concern about food demand. Some US grocery stores area reporting increase in hoarding. US July food prices were up 31 pct. Higher raw material cost, labor, cost and transportation cost continues to narrow food companies margins. Weekly US wheat export sales are estimated near 250-500 mt vs 293 last week. US fob HRW price is near $340 vs Baltic $295, Germany $299, Russia $295 and France $299. There is talk Russia export tax could increase to $70 versus current est near $30. This week, Matif futures reversed from contract highs due to option expiration. Steep rally In Matif wheat futures helped rally US futures to new highs. Break in Matif futures triggered profit taking in US futures. Some feel Dec-Feb US Chicago and KC futures could trade over 8.00 due to tighter World exporters supplies.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
