Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
With the exception Dec-23, prices were mixed and within $.01 of unchanged. Dec-23 was down $.04 on heavier than expected deliveries. It was inside trading session for Mch-24 with next resistance at the 50 day MA at $4.94 ½. USDA figures from after Friday’s close showed 462 mil. bu. of corn was used in the production of ethanol in Oct-23, nearly 10 mil. above expectations and up 3% from Oct-22. In the first 2 months of the 2023/24 MY corn usage has reached 891 mil. bu. up 7% from YA, vs. the USDA forecast of up 3%. Last week Money managers sold nearly 21k contracts of corn extending their short position to just over 206,000, their largest short position since June-2020. MM’s as a whole have their largest short position in the Ag. space since July-2020. Brazil’s Trade Ministry estimate they exported 7.4 mmt of corn in Nov-23, up 26% from Nov-22 and a record high for the month. US export inspections at 46 mil. bu. were above expectations and a new MY high. YTD inspections at 332 mil. are up 27% from YA, vs. the USDA forecast of up 25%. In addition the USDA announced the sale of 267k tons (10.5 mil. bu.) of corn to Mexico. StoneX lowered their Brazilian production forecast nearly 2 mmt to 123.8 mmt, well below the USDA forecast of 129 mmt.
SOYBEANS
The soybean complex was lower across the board in 2 sided trade. Beans finished $.15 – $.19 lower, meal was down $3 – $6, while oil is down 10 – 20. Jan-24 soybeans have fallen to a 1 month low with next support at $12.97 ½. Jan-24 meal violated support at its 50 day MA at $410.80, next support is the 100 day MA at $404.20. An improving weather picture in SA seemed to weigh on soybean valuations. Rains across SA was largely as expected over the weekend with additional chances for scattered showers the next 24-48 hours and again this upcoming weekend. So far a normal monsoonal rainfall pattern has yet to emerge across central and northern growing regions of Brazil however longer range maps hint this may start to occur by mid-month. Conditions in Argentina continue to be mostly favorable. US crush figures from Oct-23 at 201.4 mil. bu. were a record high and at the high end of expectations. In the first 2 months of the MY soybean crush has reached 376 mil. bu., up 3% from YA, vs. the USDA forecast of up 4%. Despite the record high crush, soybean oil stocks fell to 1.507 bil. lbs., below expectations and the lowest in nearly a decade. Last week MM’s were net sellers across the entire soy complex with just over 14k contracts of beans and close to 2k contracts of both meal and oil. MM’s remain net long 67.5k contracts of beans, 136k contracts of meal, and short nearly 5k contracts of oil. Export inspections at 41 mil. bu. were a MY low and slightly below expectations. YTD inspections are down 14% from YA, vs. the USDA forecast of down 12%. This AM the USDA announced the sale of 183k tons of meal to the Philippines. AgRural estimates Brazil’s soybean crop is 83% planted, up from 74% LW. They also lowered their production forecast just over 4 mmt to 159.1 mmt, vs. the USDA est. of 163 mmt. StoneX lowered their production forecast 3 mmt to 162 mmt. Brazil’s Trade Ministry estimate they exported 5.2 mmt of beans in Nov-23, double sales from Nov-22 and also a record high for the month. Stats Canada raised their canola production forecast nearly 1 mmt to 18.3 mmt, however was within the range of expectations.
WHEAT
Prices were higher across all 3 classes with Chicago up $.15 – $.19, KC was $.10 – $.12 higher while MGEX was up $.06 – $.09. Chicago Mch-24 traded above resistance at the Nov-23 high with next resistance is the 100 day MA, currently $6.33 ¼. KC Mch-24 stopped just shy of its 50 day MA at $6.62. Last week MM’s were net sellers of nearly 12k contracts of Chicago, 2,200 contracts of KC and just over 1,300 in MGEX. Their combined short position in all 3 classes of wheat swelled to a record high of nearly 199k. US wheat export inspections at only 7 mil. bu. were below expectations. YTD inspections at 306 mil. are down 24% from YA, vs. the USDA forecast of down 8%. More importantly however the USDA announced the sale of 440k mt (16 mil. bu.) of SRW wheat to China. This AM Stats Canada raised their all wheat production to nearly 32 mmt, roughly 1 mmt above expectations. ABARE is estimating Australian wheat production at 25.5 mmt, while down 37% from YA, it’s still 1 mmt above the Nov-23 USDA forecast. SovEcon estimates Russia exported only 370k mt of wheat last week, down from 560k the previous week. IKAR suggests Russia’s export price ended last week at $236/mt, up $1 from the previous week. Egypt is seeking an unspecified amount of wheat in a tender that expires tomorrow.
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