Written Commentary
Ag Market View for July 26.24
July 26, 2024
SOYBEANS
The soybean complex was mostly lower in choppy 2 sided trade. Beans were steady to $.06 lower, meal was up $4 in spot Sept-23 while deferred contracts were down $1 – $2. Oil was 50 – 100 lower. After briefly trading above $14 overnight, Nov-23 beans stalled out, turning lower while closing the gap left from Sunday nights open. Next support is at Friday’s low of $13.68. Longer term support at the 50 day MA, currently $13.51. Oct-23 oil had an outside day down however remains in a broad trading range between 61.90 and 67.15. Support for Oct-23 meal is at the 50 day MA, currently $402.70 with resistance at $423. Spot board crush margins were slightly lower with soybean meal gaining .5% of product value to 56.3%. The USDA announced the sale of 266k tons (10 mil. bu.) of soybeans to an unknown buyer. Deliveries in the soybean complex are likely to be minimal with no contracts registered against soybeans or meal, with only 67 registered for soybean oil. In further efforts to boost currency reserves, yesterday afternoon Argentina’s Ag. Sec. informed soybean exporters they could keep 25% of Sept 4th. The remaining 75% will then immediately be converted to Argentine peso’s at a fixed exchange rate. Farm Futures magazine suggests US soybean acres will expand 2.3% in 2024 to 85.4 mil. acres. Export sales are expected to range from 25 – 65 mil. in soybeans, 0 – 10k tons for oil, and 200 – 600k tons for soybean meal.
CORN
Prices closed $.04 – $.08 lower ahead of tomorrow’s FND for Sept-23 futures despite less than ideal finishing weather. Deliveries of corn are expected to be zero with no contracts registered for delivery as of Tues night. Contracts can be registered up to 4 pm today. After failing to trade back above the $5 level yesterday, prices continue to grind lower. Overall Dec-23 remains rangebound between $4.75 – $5.05. There were some passing showers in Cent. IL and northern IN yesterday. While overall coverage and accumulated totals weren’t impressive, they were probably a bit better than expected. Outside of some widely scattered showers early next week in the NC Midwest, little to no rain is expected across the nation’s midsection over the next 10 days. With temperatures expected to surge back to much above normal readings, I look for the late season stress to be a drag on finishing yields. Ukraine’s Ag. Ministry reports that since July 1st thru Aug. 30th they have been able to export 4.34 mmt of grain, above the 3.96 mmt from the same period YA. This includes 1.98 mmt of corn. Ethanol production for the week ended Fri. Aug. 25th fell to 1,007 tbd, down from 1,048 the previous week. This marks the lowest production level in 3 months. Ethanol stocks fell to a 9 month low at 21.6 mil. barrels. Corn usage for the week was 101 mil. bu. bringing YTD usage to roughly 5.123 bil. bu. With only 6 day left in the 2022/23 MY I suspect overall corn usage will come up 10 – 15 mil. bu short of the USDA forecast of 5.225 bil. bu. Implied gasoline usage last week rebounded 2% to 9.068 mil. barrels per day. This was also 5.6% above YA. In a survey of US farmers, Farm Futures magazine estimates corn plantings in 2024 will drop 1% to 93.1 mil. acres. Export sales tomorrow are expected to range between 15 – 45 mil. bu.
WHEAT
Prices were mixed with Chicago finishing $.04 – $.07 higher, KC was steady to $.05 higher, while MGEX was $.05 – $.07 lower. After holding support at its contract low of $5.99 ½ overnight, Dec-23 Chicago has bounced, likely on short covering ahead of FND and the 3 day weekend. Spot KC slipped to its lowest level since Oct-21 before staging a modest recovering. Dec-23 MGEX made a new contract low. Deliveries against Sept-23 Chicago are expected to range from 200 – 1,000 contracts and from 0 – 200 against KC. Registrations for delivery against Chicago stood at 1,368 as of Tues, with 147 against KC. Ukraine’s wheat exports since July 1st have reached 1.88 mmt. The Farm Futures survey suggests 2024 all wheat plantings will rise nearly 6% to 52.68 mil. acres. Winter wheat acres are forecast to climb nearly 2 mil. to 38.665 mil. acres which if realized would be the highest since 2015. Spring wheat varieties are expected to jump to just over 14 mil. Egypt’s GASC bought 240k tons of wheat with 120k coming from France and 120k from Romania. The French wheat was purchased at $279.50/mt CF for early to mid-Oct shipment, while the Romanian wheat was purchased at $275.75/mt CF for late Oct or early Nov shipment.
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