Written Commentary
Ag Market View for May 2.24
May 2, 2024
CORN
Today’s late surge enabled May-24 to close just above its 50 day MA resistance. This marks the 3rd time since late March. The first 2 times prices quickly pulled back below the technical indicator. Dec-24 quickly rejected trade below $4.60, however today’s rally stalled out right at its 50 day MA. Spreads continue to firm. Showers have exited the ECB with much of the Midwest left in a cool, dry pattern this weekend. Rains over the next 5 days expected to favor East TX and the US gulf coast. Good rains have shown up across the southern half of IA days 6 and 7. The USDA announced the sale of 216.5k mt (8.5 mil. bu.) of corn to Mexico, most of it new crop 2024/25. In addition, the EPA announced they will allow the expanded sale of E-15 during the summer months. Late Thursday the BAGE estimated Argentine corn harvest has reached 17% while holding their production forecast unchanged at 49.5 mmt. Cattle on feed as of April 1st at 101% of YA was just below expectations of 102%. Marketings at 86% and placements at 88% were both below expectations of 89% and 92% respectively.
SOYBEANS
Prices were higher across the complex in choppy 2 sided trade. A day after establishing a new contract low close, May-24 beans staged an outside day higher trade. Near term resistance is the 50 day MA, currently $11.74 ¼, followed by the March high at $12.26 ¾. May-24 meal made a new high for the month with next resistance at the March high of $347.60. May-24 oil traded to a fresh 3 year low for the spot contract before recovering. An overnight surge in energy prices fueled by Israel’s retaliatory strike against Iran helped kick start a broad based commodities rally. For the week, crush margins increased nearly $.05 to $.94 bu., with soybean oil PV falling to 39.2%, the lowest since late Jan-24. Net drying is expected for much to Brazil in the next week to 10 days. The exception being RGDS in the deep south where heavy rains may lead to localized flooding while delaying the remaining soybean harvest. Today’s forecast is also wetter for NE Argentina, also threatening harvest delays. The USDA announced the sale of 121.5k mt (4.5 mil. bu.) of soybeans to an unknown buyer, most of it for new crop 2024/25 MY. Late Thursday Argentina’s Ag. Ministry forecast their soybean production at 49.7 mmt, while the BAGE held their production forecast unchanged at 51 mmt. They also estimate the crop to be 14% harvested. China’s pig inventory at the end of March stood at 408.5 mil. head, down 5.2% from YA. Their sow heard has declined to just below 40 mil. head, down 7.3% from YA. The Govt. continues to urge for reduced hog capacity while lowering their national target for breeding sows to 39 mil. head, down from the earlier target of 41 mil.
WHEAT
Prices were higher across all 3 classes today with Chicago up $.13 – $.14 while KC and MGEX were $.05 – $.10 higher. The overnight surge in Chicago May-24 stalled right at its 50-day MA resistance at $5.58 ½. KC May-24 briefly traded to a new high for the week before pulling back. For now the $5.25 – $5.75 range for spot Chicago and $5.50 – $6.05 range for spot KC remain intact. Longer range models do see improved prospects for rain in the Southern plains, however amounts and coverage appears lightest for western KS. India’s Govt. reports wheat stocks as of April 1st at 7.5 mmt, down from 8.35 mmt YA and the lowest in 16 years. In their most recent forecast, SovEcon lowered Russia’s 2024 wheat production 1 mmt to 93 mmt, still above the USDA forecast of 91.5 mmt. Russia’s Ag. Ministry announced they raised their wheat export tax 5% to 3,443 roubles/mt.
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