Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices firmed up late, drawing support for the soybean complex closing steady to $.01 higher. Mch-24 was unable to hold trade above $4.50 in early trade. Next resistance for Mch-24 at last week’s high of $4.60 followed by the 50 day MA at $4.73 ¼. Support is at the contract low of $4.36 ¾. Heavy rains are expected this week along the US Gulf coast and Delta regions cutting into drought conditions. Little moisture is expected in the northern plains and western corn belt where drought conditions will likely to deepen a bit. US corn is priced slightly below Argentine supplies only thru the end of Feb-24. Farm Futures magazine survey of US farmers estimates 2024 corn acres at 92.8 mil., down just over 1.8 mil. from YA and slightly below the S&P Global forecast of 93 mil. acres. EU corn imports thru Jan.19th have reached 9.86 mmt, down 42% from YA. Algeria is seeking 240k mt of SA feed corn in a tender that closes tomorrow.
SOYBEANS
Soybeans and soybean meal prices pushed into new highs in late day trading. Beans closed $.10 – $.15 higher with spot Mch-24 reaching its highest close in 2 weeks. Next resistance is $12.51 ½. Meal was up $3 – $5 with next resistance for Mch-24 at $373.60. Oil was steady to 5 higher, next resistance for Mch-24 is its 50 day MA, currently 49.80. Little change with the SA forecast. Rains this week in Brazil likely to favor the central and northern growing regions following last week’s rains that were more concentrated in the South. This week’s rains may temporarily delay soybean harvest however will help build moisture reserves for the 2nd corn crop. Argentina is expected to remain dry for the next week to 10 days which will elevate crop stress in central and southern Buenos Aires and La Pampa. Follow up rains will be needed by early Feb-24 to avoid production losses. Spot board crush margins slipped $.03 today to $.85 ¼ and remain historically weak. Farm Futures estimates US soybean acres at 84.95 in 2024, up 1.35 mil. from YA and slightly below the S&P Global forecast of 85.5 mil. acres. China continues to encourage reduced hog capacity after farmers lost nearly $11 per head in 2023. By the end of 2023 China’s hog herd was 434 mil. head, down 4% from the end of 2022. They expect another couple months of reducing herd size will result in supply/demand equilibrium. EU 23/24 soybean imports as of Jan. 19th have reached 6.6 mmt, up 4% from YA. The USDA is currently pegging combined Brazil and Argentine production at a record 207 mmt, well above the previous record of 185.7 mmt 3 years ago.
WHEAT
Prices were mixed with KC holding $.05 – $.10 gains into the close while both Chicago and MGEX closing near unchanged. Next resistance for Mch-24 KC is its 50 day MA at $6.31 ¾. Chicago Mch-24 stalled out after challenging both 50 and 100 day MA resistance in early trade. Mch-24 MGEX failed to hold above $7.00 into the close. Farm Futures survey estimates all US wheat acres at 48 mil. in 2024, down 1.6 mil. from YA. Their winter wheat acres at 37.26 mil. were well above the USDA est. in January at 34.425 mil. FF spring wheat acre forecast at only 9.055 mil. is down 2.15 mil. from YA and well below the S&P Global forecast at 11.1 mil. Some Australian wheat production estimates are creeping up as high as 30 mmt, still well below YA record of 40.6 mmt however well above the current USDA forecast of 25.5 mmt. EU soft wheat exports since Jan. 19th at 17.6 mmt are down 7.6% from YA.
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