Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were mixed with all contracts closing within $.01 of unchanged. Mch-24 corn briefly traded above yesterday’s high before pulling back. First support is at yesterday’s contract low of $4.51 ¾ followed by $4.47. Moving average resistance keeps drifting lower with the 50 day at $4.80 and 100 day at $4.90. The next major winter storm is expected to impact the nation’s midsection starting Thursday evening thru Saturday. Heavy snow and high winds from Eastern NE and KS across Iowa and N MO thru the Great Lakes region will disrupt travel and stress livestock. Conab lowered their Brazilian corn production forecast nearly 1 mmt to 117.6 mmt, well below the USDA Dec-23 est. of 129 mmt. They kept their 2nd crop unchanged at 91.2 mmt. If Conab’s est. is realized it would still be the 2nd largest crop ever, however would be 14% below last year’s record production of 137 mmt. Ethanol production last week rebounded to 1,062 tbd, above expectations and well above the pace needed to reach the USDA corn usage forecast of 5.325 bil. bu. Thru the first 4 months of the 2023/24 MY corn usage is running nearly 7% above YA, vs. the USDA forecast of up only 3%. Export sales tomorrow are expected to range from 16 – 36 mil. bu. Argentine corn is now being offered below US supplies March forward.
SOYBEANS
The complex was lower across the board with beans down $.08 – $.13, meal was $3 – $5 lower, while oil was down 20 – 30. It was an inside trading session for Mch-24 beans and meal, however both closed near session lows. Mch-24 oil seems to be building support above $.48 with next resistance at the 50 day MA currently $.5011. Conditions is SA are expected to remain mostly favorable thru late January. Conab lowered their Brazilian bean production forecast by nearly 5 mmt to 155.3 mmt, vs. the Dec-23 USDA forecast of 161 mmt. Keeping Paraguay’s production unchanged at 10 mmt would result in combined production from the 3 largest producers in SA to reach 215 mmt, down 4 mmt from Dec-23 however still well above the previous record of 195 mmt from 4 years ago. The Malaysian Palm Oil Board reports end of Dec-23 stocks 2.29 mmt down 4.6% from Nov-23 and below expectations. Dec-23 production at 1.55 mmt was down 13% from Nov-23.
WHEAT
Prices were mixed with Chicago and MGEX closing steady to $.03 higher while KC was $.01 – $.02 lower. It was an inside trading day for Mch-24 Chicago as it consolided near its 100 day MA at $6.11, just below yesterday’s high of $6.13 ¾. An inside trading day for KC Mch-24 as well with next resistance at 50 day MA $6.39. Bitter cold is expected to dip down from Canada with weekend low temperatures reaching sub-zero readings as far south as the TX panhandle and Northern OK. Daily lows of 15 – 25 below zero will be widespread across the northern plains potentially damaging winter crops. Better snow coverage exists across the southern plains from this week’s winter storms. Conab lowered their Brazilian wheat production est. 1.7 mmt to 8.1 mmt, now slightly below the Dec-23 USDA forecast of 8.4 mmt. Tunisia reported bought 50k mt of durum wheat at an average price just under $470/mt CF. Thailand is believed to have purchased 60k mt of feed wheat at $264/mt CF. Yesterday Jordan declined offers for their 120k mt tender. Black Sea freight brokers estimate Ukraine shipped 4.8 mmt of agricultural goods in Dec-23, more than any more under the UN sponsored Black Sea agreement that expired earlier in 2023.
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