Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices finished steady to $.02 lower in 2 sided trade with bull spreading noted. Mch-24 held above yesterday’s low at $4.46 ¼. Since bottoming in early January spreads have rebounded as farmers aren’t eager to sell at these prices. Export sales at 38 mil. bu. were in line with expectations. YTD commitments have reached 1.279 bil. up 35% from YA, vs. the USDA forecast of up 26%. Commitments represent 61% of the USDA forecast, below the historical average of 63%. US corn area in drought fell 1% last week to 33%, the lowest since May-23 at 25%. The states most impacted by drought are MS, LA and TN at 100%, 95% and 84% respectively. Look for these levels to drop next week with the heavy rains this week. The BAGE reports Argentine corn plantings have reached 97%. Crop ratings fell more than expected with G/E down 5% to 41%. Fair increased 2% to 53% while 6% of the crop is rated poor, up 3% for the week. Despite the lower ratings they expect production to reach 56.5 mmt, up from the USDA est. of 55 mmt.
SOYBEANS
Prices were lower across the soybean complex today with beans down $.13 – $.17, meal was $4 – $5 lower, while oil was down 60 – 80. Mch-24 beans failed on a challenge of $12.50 overnight setting up an outside day down. An outside day down in Mch-24 meal as well with next support at this week’s low of $351.40. Mch-24 oil has traded to an 8 month low, with next support at the May-23 low at 44.50. Spot board crush margins slipped another $.02 ½ today to $.77 bu. a 7 month low. Rains over the next week are expected to favor northern growing regions in Brazil with shower activity in week 2 shifting further south. While moisture may slow harvest activities it will benefit later maturing soybeans and provide subsoil reserves for the 2nd corn crop. Argentina is expected to remain dry for the next week to 10 days with temperatures rising to much above normal levels by early next week. There is better prospects for rain the following weekend, however coverage is expected to be erratic while confidence that far out is not high. Export sales at 21 mil. bu. were at the low end of expectations. YTD commitments at 1.394 bil. bu. are down 18% from YA, vs. the USDA forecast of down 12%. Commitments represent 80% of the USDA forecast, below the historical average of 83%. I continue to lean to a 25 mil. bu. reduction from the current USDA export forecast of 1.755 bil. Soybean meal sales at 256k tons were in line with expectations. YTD commitments are 14% from YA vs. the USDA forecast of up 4%. Refinitiv Commodities lowered their Brazilian soybean production forecast 2% to 149.3 mmt, below the USDA est. of 157 mmt and Conab at 155.3 mmt. US soybean area in drought also fell 1% to 36%, the lowest since May-23. The BAGE reports Argentine soybean plantings have reached 98%. Crop ratings fell more than expected with G/E down 11% to 44%. Fair increased 5% to 48% while 8% of the crop is rated poor, up 6% for the week. They expect production will reach 52.5 mmt, up from the USDA est. of 50 mmt.
WHEAT
Prices held higher across all 3 classes at today led by KC which was up $.08 – $.11 in old crop contracts. MGEX finished $.04 – $.05 better with Chicago up $.01 – $.02. KC Mch-24 broke thru resistance at its 50 MA at $6.30 ¾ with next resistance at $6.48 ½. The 50 and 100 day MA’s near $6.05 will now serve as support for Mch-24 Chicago. Resistance for MGEX Mch-24 comes in at $7.18. Mch-24 KC jumped out to a $.25 premium over Chicago, a 6 week high. Perhaps holding Chicago back is the lack of SRW shipments to China. Of the 60 mil. bu. outstanding sales to China, 57 mil. are SRW. The large announced SRW sales to China in Dec-23 haven’t been cancelled, but they haven’t been shipped either. Export sales at 17 mil. bu. were at the high end of expectations. YTD commitments at 608 mil. bu. are up 3% from YA, vs. the USDA forecast of down 4.5%. US winter wheat area in drought fell another 5% to 22%, well below the 59% from YA. Spring wheat area in drought held steady at 28%, well below the 64% from YA, however above the 4% in June-23.
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