Written Commentary
Ag Market View for October 7.24
October 7, 2024
CORN
Prices were down $.05 – $.06 today closing near session lows. Support for Mch-24 is at the contract low of $4.36 ¾. Resistance is at $4.62 followed by the 50 day MA at $4.71 ¼. Major weather models are leaning toward a wetter outlook for Argentina Feb. 5th – 10th. If verified these rains will provide relief to areas of stress following a few weeks of warm/dry weather. Not much change in Brazil with showers expected to remain over northern growing areas in week 1 of the outlook. By week 2, showers are expected to slide south keeping nearly the entire country in a favorable weather pattern. The BAGE reports the Argentine crop is 97% planted. Crop ratings fell more than expected with 41% of the crop G/E, down 5% from LW. Fair increased 2% to 53% while 6% of the crop was poor, up 3% from the previous week. Despite the lower ratings they raised their production forecast 1.5 mmt to 56.5 mmt. Despite the strong sales to date, the US export forecast at 2.1 bil. bu. appears optimistic unless Brazil’s production falls below 120 mmt. With Brazil at 120 mmt and Argentina at 56.5 mmt, combined production at 176.5 mmt is still record high, up 3% from YA.
SOYBEANS
The soybean complex was mixed with beans down $.12 – $.14 closing near their lows, meal was $7 – $9 lower, while oil was up 25 – 40. Despite the weakness Mch-24 bean remains in a $12.01 – $12.51 trading range for now. Mch-24 meal fell to its lowest level since July-22. Next support at $344. Mch-24 oil rebounded after establishing a fresh 8 month low just above $.46 lb. First resistance is this week’s high of 48.65. While there were no corn or soybean sales reported, the USDA did announce the sale of 100k mt of soybean meal to an unknown buyer. Spot board crush margins slipped another $.02 today to $.75, establishing a fresh 7 month low. The BAGE reports the Argentine crop is 98% planted. Crop ratings fell more than expected with 44% of the crop G/E, down 11% from LW. Fair increased 5% to 48% while 8% of the crop is poor, up 6% from the previous week. Despite the lower ratings they also raised their bean production forecast 2.5 mmt to 52.5 mmt. The Chinese hog herd at the end of 2023 at 434 mil. head was down 4% for the year. The sow herd at 41.4 mil. head was down 5.7% YOY. As harvest accelerates in Brazil, soybean basis continues to weaker making US less competitive in the global marketplace.
WHEAT
Prices were lower across all 3 classes today with MGEX down $.05 – $.07, while Chicago and KC were $.10 – $.12 lower. So much for old resistance now being support as Mch-24 Chicago plunged below its 50 and 100 day MA’s, both at near $6.05. Next support is at the Jan-24 low at $5.73 ¼. An outside day down for Mch-24 KC with next support at contract low of $5.86 ¾. Little to no rain across much of the WCB and US plains over the next week while the Delta, Missouri Valley and eastern US remains wet. Both the 6-10 and 8-14 day outlooks expect above normal temps across the nation’s midsection with better prospects for rain in the WCB and plain states. Very little global trade on the recent bump up in price. The Argentina government today stated they have approved the export of wheat to China. Current USDA projections have Argentina as the 7th largest wheat exporter at 10 mmt, which accounts for only 5% of the global trade. It’s unlikely to move much with endings stocks projected at 2.4 mmt. Russian state media claims they have provided 50k mt of grain to needy African nations. Their Ag. Ministry today raised their wheat export tax just over 1% to 3,620 roubles/mt thru Feb. 6th. Turkey announced a tender for 150k mt of durum wheat with a deadline of Feb. 2nd. Wheat is for shipment mid-Feb thru mid-March.
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