Written Commentary
Ag Market View for July 26.24
July 26, 2024
SOYBEANS
The soybean complex was higher across the board today with beans up $.14 – $.18, meal $2 – $4 higher, while oil was up 10 – 20. Nov-23 gapped higher overnight, surging above $14 for the first time in a month. Next resistance is at the July high of $14.35, followed by the contract high of $14.48 ¼ from April-22. Oct-23 meal also made a new monthly high, next resistance is at $429.70. Oct-23 oil settled back to close just above unchanged. Next resistance is at the July high at 67.15. Pro Farmer estimated US soybean production at 4.111 bil. bu. with an average yield of 49.7 bpa, 94 mil. bu. below the Aug-23 USDA est. of 4.205 bil. The USDA announced the sale of 296k tons (11 mil. bu.) of soybeans to an unknown buyer. Export inspections at 12 mil. bu. were in line with expectations. YTD inspections at 1.906 bil. are down 8% from YA, in line with the USDA forecast. Friday’s CFTC report showed Money managers were net buyers of soybeans and soybean oil, while being lite sellers in soybean meal. MM’s remain long across the soybean complex with their net position rebounding to just over 166k contracts. The MM long position in soybean oil is back up to 55k contracts, the highest since early Jan-23. The Chinese sow herd fell .6% in July-23 from the previous month to 42.7 mil. I look for soybean ratings to slip 3 – 5% in G/E on Monday. Stats Canada is out at 7:30 AM CST tomorrow with updated production forecasts. Canola production is expected at 17.4 mmt, down from 18.2 mmt YA.
CORN
Prices were up $.07 – $.08 higher, drawing support from strength in the soybean complex along with the need for additional weather premium. Weekend rainfall was a bit better than expected across the central portions of the Midwest, however forecasts moving forward offer little to no rain thru the Labor Day Holiday weekend and beyond. Temperatures are expected to build back to the low to mid 90’s for much of the central and western corn belt, while temperatures across the southern plains will likely exceed 100 degrees. Dec-23 for now remains range bound between $4.75 – $5.05. Pro Farmer estimated US corn production at 14.960 bil. bu. with an average yield of 172 bpa, 151 mil. bu. below the Aug-23 USDA est. of 15.111 bil. The USDA announced the sale of 123k tons (5 mil. bu.) of corn to Mexico. Export inspections at 24 mil. bu. were an 8 week high and above expectations of 10 – 22 mil. bu. YTD inspections at 1.448 bil. are down 33% from YA, vs. the USDA forecast of down 34%. I suspect final 2022/23 exports will come in very near the current USDA est. of 1.625 bil. bu. Friday’s CFTC report showed Money managers sold just over 33,500 contracts of corn last week, extending their short position to 106,135 contracts, their largest short position since mid-May. AgRural estimates Brazil’s 2nd corn harvest has reached 83% complete, behind the 94% pace from YA. They also report that 1st crop plantings for 2023/24 have begun in the center-south region with 7.5% of the crop being seeded. I look for corn ratings to slip 2-4% in G/E this afternoon.
WHEAT
Following mixed trade overnight, prices were lower across all 3 classes with Chicago $.04 – $.05 lower, MGEX down $.10 – $.11, while KC was $.12 – $.16 lower. Dec-23 Chicago held support above $6.12. Dec-23 KC and MGEX remain range bound at $7.39 – $7.72 and $7.88 – $8.20 respectively. Overnight a Russian missile struck a Ukrainian sunflower oil mill in the Poltava region in east central Ukraine, killing 3 and injuring 5 others. Export inspections at 14 mil. bu. were at the high end of expectations. YTD inspections at 148 mil. bu. are down 21% from YA, vs. the USDA forecast of down 8%. Last week MM’s were net sellers of just over 5.3k contracts of Chicago wheat and 6.5k of KC wheat. This extended their short position in Chicago to nearly 71k contracts, and 6k contracts in KC. India’s weather bureau expects June-Sept monsoon rains to be down 8% from normal coming in at an 8 year low. On Friday the Indian Govt. announced a 20% export duty on parboil rice exports effective immediately. Turkish officials stated that Pres. Erdogan will meet with Russian Pres. Putin soon is Sochi adding they were hopeful for positive developments for Black Sea grain exports. Spring wheat harvest has likely surpassed the halfway point, up from 39% LW. I look for ratings to drop another 1 – 2% in what likely will be the final crop condition report. Stats Canada wheat production is expected to range from 29.3 – 33.1 mmt with an average est. of to 30.4 mmt, below the Aug-23 USDA forecast of 33 mmt.
See more market commentary here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
