Written Commentary
Ag Market View for July 26.24
July 26, 2024
SOYBEANS
The soybean complex closed higher across the board with beans up $.08 – $.15, meal was up $5 – $7, while oil was 95 – 120 higher. After violating the 50 day MA overnight, Nov-23 beans rebounded, recovering all of yesterday’s losses. Oct-23 meal closed back above both its 50 and 100 day MA’s, drawing support from the announced sale of 100k tons of meal to an unknown buyer. Oct-23 oil rejected overnight trade below $.62, recovering to close back above $.64. Day 3 of the Pro Farmer crop tour appears to be uncovering lower than expected pod counts and expected corn yields along their paths thru IA and IL today. Results from today’s tour will be released this evening. At a US Soybean Export Council Conf in NYC a VP from a large Chinese meat producer stated that Chinese soybean imports will likely hold steady near 100 mmt annually for at least the next 5 years as economic growth will likely not exceed 5%, while consumers shift dietary preferences away from pork to alternatives like fish/chicken that require less feed. Export sales are expected to range from 20 – 50 mil. bu. for soybeans, 150 – 450k tons for meal, and 0 – 15k tons of oil.
CORN
Prices rebounded $.09 – $.11 today as Dec-23 closed right at the midpoint of this week’s range. Support for Dec-23 is at $4.74 with resistance at $5.06. Record heat across much of the Midwest is expected to last another 48 hours as temperatures cool to more seasonable levels by the weekend. By Monday temperatures in the upper 90’s to 100+ degrees will be limited to deep south along the gulf coast. Still very little precipitation is forecast for key growing areas into early September. The late season stress is likely to lead to significant declines in corn and soybean ratings next Monday. Ethanol production slipped to 1.048 tbd last week, down from 1,069 the previous week, however up 6% from YA. Overall corn usage was just below the pace needed to reach the USDA forecast of 5.225 bil. bu. Implied gasoline usage last week was up nearly 1% over the previous week at 8.910 mil. barrels per day and up 5.6% from same week YA. I suspect the current USDA est. is 10 – 15 mil. bu. too high. Export sales tomorrow are expected to range from 10 – 40 mil. bu. With a recent spike in Brazilian basis, US corn has become much more competitive in the global marketplace for Oct. forward. We have some catching up to do with new crop commitments down 26% from YA, while the USDA forecast is up 26% from YA
WHEAT
Prices were moderately higher today with all 3 classes closing with gains between $.10 – $17 bu. Near term resistance for Dec-23 Chicago is at $6.46 and $7.70 for Dec-23 KC. Dec-23 MGEX rebounded back above $8 and yesterday’s high with next resistance being $8.20. There were additional Russian drone attacks on Ukrainian grain storage and infrastructure facilities overnight along the Danube River in the port city of Odessa. A Ukrainian grain exporter, Nibulon said they experienced modest damage at one of their warehouses however normal operations have resumed. For now it appears Russia has raised the floor for FOB wheat offers to $260/mt as reports continue to suggest a hefty 7-9 mmt was sold at a market discount to India in direct govt-to-govt. negotiations. Nonghyup Feed is reported to have rejected all offers in their 130k mt feed wheat tender today, as prices were deemed too high. Export sales tomorrow expected to range from 10 – 18 mil. bu.
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