Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were $.03 – $.07 lower today with many spreads making new lows. After closing above its 50 day MA last Thursday for the time since October, May-24 closed back below it today in an inside trading session. US rainfall over the next 7 days will favor the central and eastern corn belts with lighter coverage in the west. The Delta region will experience much dryer conditions this week enabling planting operations to accelerate. Export inspections at 56 mil. bu. were a new MY high and above expectations. YTD inspections have reached 1.018 bil. up 33.5% from YA, vs. the USDA forecast of up 26%. Ukraine’s grain exports since July-23 have reached 34.6 mmt, down 7.5% from YA. Corn exports at 18.6 mmt are down 15.5%. Money managers last week sold 8,742 contracts of corn extending their short position to nearly 252k. Corn used for the production of ethanol in Feb-24 reached 441.5 mil. bu., in line with expectations and in line with the upwardly revised figures from Jan-24. In the first 6 months of the 23/34 MY corn usage has reached 2.714 bil. bu. up 6.5% from YA, vs. the USDA forecast of up 4%.
SOYBEANS
Prices are mixed with beans down $.03 – $.06 as spreads weakened, meal was $3 – $4 lower, while oil was up 20 – 30. May-24 closed just below its 50 day MA at $11.89 ½. May-23 oil closed just below its 100 day MA, currently 48.51. Rains are expected to bring gradual relief to dry conditions in EC and interior Southern Brazil over the coming weeks. Rains are also expected to return to previously flooded areas in EC Argentina thru far southern Brazil later this week. Export inspections at 15 mil. bu. were below expectations. YTD inspections at 1.359 bil. are down 19% from YA, vs. the USDA forecast of down 14%. MM’s last week were net buyers across the soybean complex last week having bought 13.6k beans, 15.7k oil and 17k meal. MM’s have been net buyers of roughly 120k contracts in the soybean complex over the past 3 weeks and are now net long bean oil for the first time since Nov-23. Bean oil used in the production of biofuels fell to 960 mil. lbs. in Jan-24, down 16% from Dec-23 and the lowest usage figure in 9 months. Despite the weaker than expected usage figures, demand over the 1st 4 months of the 23/24 MY has reached 4.225 bil. lbs. up 15% from YA, vs. the USDA forecast of up only 4%. AgRural reports Brazilian soybean harvest has advanced 5% to 74% complete, slightly below the 76% pace from YA. US crush only reached 194 mil. bu. in Feb-24, below expectations and down slightly from the 195 mil. crushed in Jan-24 however well above the 177 mil. from Feb-23. In the first 6 months of the 2023/34 MY cumulative crush has reached 1.170 bil. bu. up 5.5% from YA, vs. the USDA forecast of up 4%.
WHEAT
Prices were down across all 3 classes today with KC and MGEX $.07 – $.10 lower while Chicago was down only $.01 – $.03. Export inspections at 18 mil. bu. were above expectations. Moisture is expected to gradually fill in over the WCB and southern plains over the next few weeks. The overall trend for the nation’s midsection is warmer and wetter than normal thru mid-April. YTD inspections at 543 mil. are down 12% from YA, vs. the USDA forecast of down 6.5%. Ukraine’s wheat exports since July-23 have reached 13.7 mmt, up 7.5% from YA. MM’s last week sold 11.5k contracts of Chicago wheat extending their short position to 92K while also selling 5k KC and just over 2k in MGEX. The combined MM short position in wheat has swelled back out to 160k contracts, the highest in 4 months. SovEcon reports Russia exported 1.02 mmt of grain last week, down from 1.27 mmt the previous week. Wheat exports accounted for 840k tons, down from 1.14 mmt the previous week. IKAR reports Russian wheat export prices ended last week at $208/mt FOB, up from $205/mt the previous week. This marks the 3rd consecutive weekly increase.
Chart source: QST
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