Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were $.03 – $.05 higher today with most contracts experiencing an inside trading session. Spreads rebounded a touch. Dec-24 corn spent much of the day consolidating nearly its 50 day MA at $4.69 ½. Today’s 8-14 day forecast shows a shift to an above normal temperature, below normal precip. pattern. Ethanol production jumped to 1,073 tbd last week, up from 1,054 tbd the previous week, and up 7% from YA. Production was above expectations and well above the pace needed to reach the USDA corn usage forecast of 5.375 bil. There was 107.5 mil. bu. of corn used in the production process, or 15.36 mil. bu. per day, vs. 14.48 mbd needed to reach USDA. Pace analysis suggests the USDA usage forecast is too low. Ethanol stocks jumped to 26.4 mb, matching a 13 high, however were in line with expectations. Implied gasoline usage jumped 6% LW to 9.236 mbd, however were still down nearly 1% YOY. Cal-Maine reportedly culled 3.6% of its poultry flock at a TX facility after testing positive for bird flu. With nearly 2 mil. birds destroyed it’s the largest bird flu casualty in the US since early Dec-23. Datagro forecasts Brazilian corn production at 114.9 mmt, just above the Mch-24 Conab est. of 112.8 mmt, and well below the USDA est. of 124 mmt. Export sales tomorrow are expected to range between 32 – 55 mil. bu.
SOYBEANS
Prices finished higher across the entire complex with beans up $.07 – $.08, meal was $1 – $2 higher while oil was up 20 – 35. Nov-24 beans held support just above its 50 day MA. May-24 meal held support above its contract low at $323.20. An inside trading session for May-24 oil. Spot board crush margins slipped a few cents today to $.81 bu. with bean oil PV holding at a 5 month high of 42.5%. Forecasts for SA are mostly favorable. Argentina is expecting a mix of rain and sunshine over the next week to 10 days supporting late crop development while allowing early harvest operations to get going. Rains across northern growing regions of Brazil will support 2nd crop corn development. SW and WC areas of Brazil in MGDS, Parana and Western Sao Paulo will get some moisture relief by early next week, however more is needed to prevent crop stress. Iran is reportedly seeking 120k mt of SA soybean meal for June/July shipment. A Phillips66 spokesperson said they expect their new SF refinery to increase renewable diesel production to 50k bpd by the end of Q2, up from the current 30k bpd pace. They also indicate they’ll start producing SAF in Q2. Heartland Renewable’s, an 80 mil. gallon/year renewable diesel facility under construction in NE has pushed the expected completion of their project until 2026 due to labor and supply chain shortages. Datagro lowered their Brazilian soybean est. 1 mmt to 146.3 mmt, in line with Conab est. at 146.9 mmt, and well below the March USDA forecast of 155 mmt. Export sales tomorrow are expected to range from 8 – 20 mil. bu. of soybeans, 100 – 350k tons meal, and -5 – 10k tons of bean oil.
WHEAT
Prices firmed late closing back near session highs. Chicago and MGEX were up $.09 – $.12 while KC was up $.14 – $.17. May-24 MGEX failed to establish at key reversal. Key resistance for May-24 Chicago is at its 50 day MA at $5.72, same for KC May-24 at $5.90. Little moisture is offered for growing drought areas of Northern MN and ND in the next week. Forecast models are less confident in beneficial moisture for dryer areas on the SW US plains early next week as heavier rains have shifted north and east. Tunisia is reportedly seeking 50k mt of soft milling wheat and 50k mt of durum for April/May shipment. Offers are due by April 4th for both tenders. After passing on its most recent tender Jordan is seeking 120k mt of milling wheat in a tender due April 16th. Sources suggest Russia is extending its probe of grain export quality concerns. The Russian Govt. reportedly hasn’t issued the necessary phytosanitary certificates for 2 Aston vessels, this after TD RIF last week said they’ve had 400k mt of grain shipments halted. Export sales tomorrow are expected to range from -4 – 15 mil. bu.
Chart source: QST
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