Written Commentary
Ag Market View for May 3.24
May 3, 2024
CORN
Prices were $.03 – $.04 higher settling near session highs. Near term resistance for May-24 is at the March high of $4.48 followed by the 100 day MA at $4.52 ½. Dec-24 resistance is at its 100 day MA of $4.79 ¾. By early next week 2-3+” of rain is expected across much of the central and western corn belt. Much lighter rainfall totals are expected in the ECB where planting opportunities still exist. Extended forecasts show much above normal temperatures across the Midwest with a wetter bias in the west, dryer in the east. Export sales at 61 mil. bu. (51 mil. 23/24 MY, 10 mil. 24/25) were above expectations. Old crop commitments at 1.810 bil. are up 20% from YA, vs. the USDA forecast of up 26%. Mexico was by far the largest buyer with 15.5 mil. old crop and 10 mil. of new crop. Reports suggest the Biden Administration will release its updated climate model next Tues. which will outline how corn based ethanol can qualify for tax credits under the revised plan. US corn acres in drought held steady at 23%, just below the 27% from YA. The EU Commission held their EU 24/25 corn production forecast unchanged at 69 mmt, well above the 61 mmt from 23/24. Helping support the late day recover was the BAGE showing Argentine corn conditions slipped another 3% to 17% G/E, while poor/VP increased 4% to 40%. Harvest advanced only 3% to 20% complete.
SOYBEANS
Prices were mixed today following a late recovering in bean oil which finished 15 – 20 higher. Soybean also recovered to close mixed with old crop $.01 – $.03 lower while new crop was steady to $.01 better. New lows for many of the spreads. Meal was down $1 – $2. Yesterday May-24 beans rejected trade above its 50 day MA, while today held support above $11.50. Nov-24 beans today rejected trade below its 50 day MA. May-24 meal rejected trade over $350 yesterday. Next support is at the 50 day MA at $336.10. Heavy rains in RGDS in Southern Brazil could threaten the unharvested soybean crop. Central and northern growing regions will experience net drying as monsoonal rains have ended. Soybean sales at 12 mil. (8 mil. – 23/24, 4 – 24/25) were at the low end of expectations. Old crop commitments at 1.525 bil. are down 18% from YA, vs. the USDA forecast of down 15%. Meal sales at 309k tons the highest in 8 weeks and at the high end of expectations. YTD commitments are up 15% vs. the USDA forecast of up 8%. Soybean oil sales were also very strong as buyers responded to the pull back in price. Sales at just over 16k tons bring YTD commitments 104k tons, up 1% from YA, vs. the USDA forecast of down 7%. US soybean acres in drought slipped 1% to 21%, still slightly above the 19% from YA. China’s Ag. Ministry reports the nations sow herd fell 3.6% in Q1 to just under 40 mil. head. This was also down 7.03% from YA. The BAGE reports harvest advanced 11.5% to 25.5%. Crop conditions held at 30% G/E however there was a 1% shift from fair to poor/VP. They held their production forecast unchanged at 51 mmt, however seem to have a lower bias moving forward.
WHEAT
Prices were higher across all three classes today with MGEX leading the way up $.12 – $.13 while both Chicago and KC were $.07 – $.10 better. Chicago and MGEX May-24 contracts traded to their highest levels since early Feb-24. KC May-24 traded to a 3-month high. Six consecutive higher closes for spot MGEX and KC. Export sales at 17 mil. bu. (3 mil. – 23/24, 14 – 24/25) were in line with expectations. Old crop commitments at 691 are up less than 1% from YA, vs. the USDA forecast of down 6.5%. Algeria reportedly bought 200k mt of durum wheat between $395 – $410/mt CF, depending on the size of the shipping vessel. A Taiwan flour mill purchased nearly 107k mt of US wheat off the PNW for June/July shipment. Very little change in drought readings for both US durum and spring wheat acres. Winter wheat acres in drought jumped another 6% to 30%, while still well below the 51% from YA, the trend is clearly up with drought readings at only 12% 1 month ago. The EU Commission lowered their EU soft wheat production forecast for 24/25 less than 1 mmt to 120.2 mmt.
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