Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
With the late day recovery prices closed $.03 – $.04 higher. Feed grains and soybean oil rallied late, likely speculative short covering, enabling corn, wheat and oil to all carve out session highs near the close. Mch-24 held support early at this week’s low before the late day strength. Resistance rests at the 50 day MA at $4.91 ½, and the 100 day MA at $4.97. Longer term support is at the Nov-23 low at $4.70. The BAGE reports Argentina’s corn conditions improved 4% to 40% G/E while fair slipped 3% to 59% with only 1% of the crop considered poor or VP. They report plantings at only 49% compared to the Rosario Grain Exchange that placed progress at 60%. A number of agricultural groups in Argentina reportedly are rejected the new Govt. proposal to increase the corn and wheat export tax from 12% to 15%. Port officials in Constanta Romania show 32.6 mmt of grain shipments moved thru their ports from Jan thru Nov, well above the previous record of 25 mmt. Chinese Govt. officials state that GMO corn plantings in 2024 will increase to nearly 1.7 mil. acres, more than double what was allowed in 2023. This will still only acct. for roughly 1.5% of their total corn acres. Acceptance of GMO traits continues to build in China as they continue to strive for greater food security and independence. Chinese corn yields on average fall 35% – 45% below US yields.
SOYBEANS
The soybean complex was mixed with bull spreading noted in soybeans and meal. Most beans contracts were within $.02 of unchanged, meal was within $2 of unchanged, while oil recovered to close 40 – 50 higher. Jan-24 soybeans continues to consolidate between $13 – $13.25. After falling to its lowest price level in over a month, Jan-24 oil recovered to close higher. Jan-24 meal closed above its 100 day MA at $404.20. Hot/dry conditions across central and northern growing areas of Brazil will continue into at least early next week before beneficial rains are expected. If these rains are realized crops will see short-term relief however additional moisture will be needed into January to avoid further production cuts. Conditions in Southern Brazil and Argentina remain mostly favorable with a good mix of rain and sunshine thru the end of Dec-23. The USDA announced the sale of 134k mt (5 mil. bu.) to China and 447.5k mt (16.4 mil. bu.) to an unknown buyers. The BAGE reports Argentine soybean ratings fell 5% to 30% while there was a 3% increase in fair and 2% increase in poor/VP. Seems odd that within the same week we’d see such improvement in corn and deterioration in beans. Plantings have reached 60%, up from 52% LW. NOPA crush in Nov-23 slipped less than 1 mil. bu. to 189 mil. roughly 3 mil. bu. above the Ave. trade estimate. It was still a record high for the month of November. Oil stocks rose for the first time in 7 months to 1.214 bil. lbs., up from 1.138 bil. in Oct-23 and was slightly above the range of estimates.
WHEAT
Prices are higher across all 3 classes today with Chicago and MGEX up $.11 – $.14 while KC closed $.06 – $.08 higher. Mch-24 Chicago closed back above its 100 day MA at $6.22 ½ . Next resistance is the Dec-23 high at $6.49 ½. Healthy rains this week across the US Southern plains will continue to chip away at drought conditions as soil moisture is restored in the major US winter wheat belt. Bangladesh reportedly cancelled their 50k mt tender from earlier this week. The BAGE reports the Argentine wheat crop is 55% harvested, up from 48% LW. A number of agricultural groups in Argentina are rejecting the new Govt. proposal to increase the corn and wheat export tax from 12% to 15%. The Argentine central bank maintains that a much stronger grain harvest in 2024 will help the country rebuild US $$ reserves. Russia lowered their wheat export tax to 4,018 rouble/mt down from 4,064 rouble/mt for the period ending Dec. 26th.
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