Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were $.04 – $.06 lower today with spot futures closing below $4 for the first time since Nov-2020. Next support for Mch-24 is $3.93. Dec-24 has traded to its lowest level since Sept-2021. Most spreads also weakened to new lows. Export sales at 32 mil. bu. were at the low end of expectations and a 6 week low. YTD commitments at 1.458 bil. are up 29% from YA, vs. the USDA forecast of up 26%. Commitments represent 69% of the USDA forecast, slightly below the historical average of 71.5%. The BAGE maintained their production forecast at 56.5 mmt, just above the USDA est. of 55 mmt. The Biden Administration formally approved the sale of E-15 gasoline year round in the states of IL, IA, MN, MO, NE, OH, SD and WI beginning in 2025. Ukrainian grain exports in Feb-24 have so far reached 4.3 mmt, up from 3.8 mmt YA. Since July-23 corn exports for 23/24 MY have reached 15.2 mmt. Prices have now exceeded the bottom end of my downside range for spot futures of $4.00 – $4.25. Cattle on feed as of Feb 1st was 100% of YA total, in line with expectations. Placements at 93% were above expectations of 88% while marketing at 100% were also in line with estimates.
SOYBEANS
The soybean complex was lower across the board with beans down $.05 – $.15, meal was $2 – $4 lower, while oil was down 20 – 25. In addition spreads were extremely weak. Mch-24 beans slipped to a new contract lows and the lowest spot price since Nov-2020. New contract low for Mch-24 meal and lowest spot price since Oct-2021. Next support on the weekly chart is at $323. New contract low for Mch-24 oil, next support on the weekly chart is at $.41 lb. Spot board crush margins did rebound a nickel today to $.80 ½ bu. Heaviest rains in SA in the past 24 hours favored northern Argentina and NE growing areas of Brazil. Forecasts into early March continue to suggest a good mix of rains and sunshine. Slight concern for SW Brazil where shower activity is expected to be lighter, however will favor soybean harvest and 2nd corn plantings. Export sales at only 2 mil. bu. were below expectations and a new MY low. YTD commitments at 1.428 bil. bu. are down 20% from YA, vs. the USDA forecast of down 14%. Current commitments represent 83% of the USDA forecast, below the historical average of 87%. Pace analysis suggests the USDA export forecast at 1.720 bil. bu. is still 25 – 50 mil. bu. too high. Soybean meal sales at 202k tons were at the low end of expectations. YTD commitments are up 19% from YA, vs. the USDA forecast of up 4%. The BAGE reports Argentine soybean conditions held steady at 31% G/E however there was a 2% jump in fair while poor/VP slipped 2% to 17%. They maintained their production forecast at 52.5 mmt, above the USDA est. of 50 mmt.
WHEAT
Prices were $.05 – $.10 lower across all 3 classes. Spot Chicago gained $.11 ½ on KC and just over $.26 vs. MGEX this week. Support for Mch-24 Chicago is at Tuesday’s contract low at $5.55 ¼. Support for Mch-24 KC is at contract lows at $5.63. Spreads rebounded a touch today in both CGO and KC. New contract lows today for MGEX and lowest spot price in nearly 3 years. Export sales at 10 mil. bu. were below expectations. YTD commitments at 655 mil. are up 6% from YA, vs. the USDA forecast of down 4.5%. Commitments represent 90% of the USDA forecast, just above the historical average of 87%. Current outstanding sales of SRW wheat are 79 mil. bu. with 53 mil. committed to China with another 7 to unknown. Roughly 2 mil. bu. of SRW was shipped to China last week. Tunisia reportedly bought 100k mt of optional origin soft wheat paying nearly $239/mt CF. Since July-23 Ukrainian grain exports have reached 28.2 mmt, down slightly from 30.8 mmt YA. Wheat has accounted for 11 mmt of this grain.
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