Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were down $.03 – $.05 today with most contracts experiencing an inside trading session. Support for spot Mch-24 is at Friday’s contract low of $4.41 with next support at $4.25. Resistance is at $4.60 followed by the 50 day MA, currently $4.78. Early rally attempts in corn and wheat failed largely due to a surge in the US $$. Export inspections at 34.5 mil. bu. were in line with expectations. Last week’s inspections were revised up just over 9 mil. bu. bringing YTD total to 548 mil. bu. up 29% from YA vs. the USDA forecast of up 26%. In addition the USDA announced the sale of 127k tons (5 mil. bu.) of corn to Mexico. Dr. Cordonnier lowered his Brazilian corn production forecast 2 mmt to 115 mmt, well below the USDA forecast of 127 mmt, and even below Conab’s est. of 117.6 mmt. He also raised his Argentine est. 3 mmt to 56 mmt, just above the USDA forecast of 55 mmt. An analyst from the Rosario Grain Exchange suggested the Argentine corn crop has a good chance of toping 60 mmt, above their official est. of 59 mmt, and well above the previous record of 52 mmt. Brazil’s 1st crop harvest has reportedly reached 5%, while 2nd crop plantings are just underway. EU 23/24 corn imports have reached 9.5 mmt as of Jan. 14th, down 42% from YA.
SOYBEANS
Prices were mixed with beans steady to up $.03 with bull spreading noted, meal was $4-$9 higher also led by spot months, while oil fell 80 – 100. Mch-24 beans settled at the midpoint of its range from the past week. Mch-24 meal closed above last week’s high, next resistance at $381.50. Mch-24 oil carved out its lowest close in 7 ½ months with next support at 46.30. Spot board crush margins improved nearly $.06 to $1.09 with soybean meal gaining 1% in PV to 61%. Forecasts thru the end of the month remain mostly favorable for SA. Much of Brazil will receive moisture over the next week to 10 days however will maintain a net drying bias across the northern half. Area of most concern due to drying will be Bahia in the NE growing areas. Central Argentina will experience another round of rain today before a net drying pattern develops. Dr. Cordonnier lowered his Brazilian production forecast 2 mmt to 149 mmt, while raising his Argentine est. 2 mmt to 52 mmt. His Brazilian forecast is well below Friday’s USDA update at 157 mmt and Conab’s 155.3 mmt forecast. AgRural also slashed their forecast for Brazil by 9 mmt to 150 mmt. The lower production forecasts have been driven by disappointing early yields with harvest having reached 2-3%. NOPA crush in Dec-23 reached a new record high at 195.3 mil. bu, above the previous record of 189.8 mil. in Oct-23. Figures came in above the range of est. of 190 – 195 mil. As a result oil stocks surged to 1.360 bil. lbs., also above the range of estimates of 1.190 – 1.290 bil. NOPA figures would imply total industry crush also at a new record high of 206 mil. bu. bringing YTD crush in the first 4 months of the 2023/24 MY to 782 mil. bu., up 5.5% from YA, vs. the USDA forecast of up 4%.
WHEAT
Prices were lower across all 3 classes today with Chicago and KC down $.12 – $.15 while MGEX was $.07 – $.09 lower. Mch-24 Chicago and KC both fell to a 7 week low while Mch-24 MGEX established a new contract low. Last week MM’s were lite buyers of KC and Chicago wheat, while a net seller of nearly 2k in MGEX. Frigid temperatures in the US plains and Midwest were consistent with last week’s forecasts. No significant damage expected for winter wheat crops in the Southern plains. Some damage is possible across smaller producing areas of the western Dakota’s and Montana where snow cover was minimal. Extended forecasts suggest a return to above normal temps across the US by the last week of January. SovEcon estimates Russian wheat exports last week totaled 640k mt, down from 750k mt the previous week. They went on to state that Russian wheat exports in Dec-23 likely fell below the 3.9 mmt they sold in Nov-23 marking a 3rd consecutive monthly decline. Algeria reportedly bought between 500k – 650k mt of milling grade wheat in their tender which closed today. It was believed to have been purchased around $265/mt CF for April-24 shipment. It’s believed to have been sourced from EU Black Sea region and France, with none from Russia. Tunisia is seeking 150k mt of optional origin soft milling wheat and 50k mt of durum. Japan’s Ag. Ministry is seeking 88k mt of Canadian and US milling wheat. EU wheat exports for 23/24 have totaled 16.9 mmt since last July, down 7% from YA. Egypt’s GASC this afternoon announced a snap tender for wheat that closes tomorrow.
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