Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were $.01 – $.02 higher in choppy 2 sided trade. Overnight strength faded resulting in a selloff to new contract lows, before end user buying and/or short covering brought prices back to slightly higher levels. Today was the 5th consecutive session Mch-24 failed to trade above the previous day’s high. A day after a Chinese GMO seed manufacturer stated over the next 3 – 5 years GMO crop penetration could reach 85%, the Chinese Govt. approved 8 more traits, 6 corn and 2 soybeans. Acceptance of GM technology continues to grow as they strive for greater food security. Chinese corn imports in Dec-23 were nearly 5 mmt, up 470% from Dec-22. All of 2023 imports reached 27.1 mmt, up 31.6% from 2022. Ethanol production last week slipped to 1,054 tbd, down from 1,062 the previous week. There was 106 mil. bu. of corn used in the production process, still above the pace to reach the revised USDA corn usage forecast of 5.375 bil. bu. Ethanol stocks surged to 25.7 mb, well above expectations and the highest in 10 months. US corn area in drought dropped 11% last week to 34%, well below the 47% from YA. Export sales tomorrow are expected to range from 20 – 50 mil. bu. The BAGE reports corn plantings have reached 93%. 46% of the crop is rated G/E, up 10% from last week. Only 3% of the crop is rated poor, down 2%.
SOYBEANS
Prices are mixed today with beans up $.02 – $.08 with bull spreading noted, meal was $1 – $3 higher, while oil steady to down 10. Although Mch-24 beans traded down to a fresh 7 month lows, price held above the key $12 level, closing near session highs. Next support is at $11.71. Mch-24 meal has held above support at $353. Near term resistance at $373.60. Following a slew of winter storms across our nation’s midsection, the updated US drought monitor showed lower drought ratings across key corn and soybean growing areas. South American weather remains mostly favorable with nearly all of Brazil receiving moisture in the next week to 10 days. Rains are expected to favor central to northern growing regions. Dry condition in Argentina are expected to last thru late January which is needed following recent heavy rains in central growing areas. Follow up rains, particularly in Southern BA and La Pampa, are needed by late Jan/early Feb to minimize crop stress. Spot board crush margins were little changed today stabilizing at just over $1.00 per bu. in recent sessions. US soybean area in drought dropped 15% last week to 37%, slightly below the 39% from YA. Export sales tomorrow are expected to range from 15 – 35 mil. bu. for beans, 100 – 400k tons meal, and 0 – 5k tons of oil. The BAGE reports bean plantings have reached 97%. 55% of the crop is rated G/E, up 4% from last week. Only 2% of the crop is rated poor, down 1%. AgroConsults reports that a record 2.9 mil. HA of soybeans needed to be replanted in Brazil, representing 6.5% of the crop. They slashed their production forecast 7.8 mmt to 153.8 mmt, just below the USDA est. at 157 mmt and Conab at 155.3 mmt.
WHEAT
Prices are higher across all 3 classes at midday. After establishing fresh contract lows in both Mch-24 KC and MGEX, selling dried up enabling prices to push to double digit gains. KC was able to hold double digit gains, MGEX wasn’t. Neither carved out a key reversal. Jordan is seeking another 120k mt of optional origin milling wheat for Spring shipment in a tender that closes next Wed. the 24th. Lebanon’s Govt. reportedly bought 72k mt of Ukrainian milling wheat between $250.50 – $252.50/mt CF for Jan/Feb shipment. Japan’s Ag. Ministry bought nearly 88k mt of US/Canadian food grade wheat. Strategie Grains lowered their 2024/25 EU soft wheat production forecast just over 2 mmt to 122.7 mmt. US winter wheat areas in drought fell 6% to 27%, well below the 59% from YA. Spring wheat acres in drought increased 2% to 28% vs. 64% YA. Chinese wheat imports in Dec-23 at only 610k tons were down 44% from Dec-22. Total imports in 2023 at 12.1 mmt were up 21.5% YOY. Export sales tomorrow are expected to range from 6 – 16 mil. bu. The BAGE reports Argentine wheat harvest has reached 98%.
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