Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were $.06 – $.08 higher today. After making a new contract low by ¼ cent overnight, Mch-24 closed ¼ cent above yesterday’s high, establishing a key reversal day. The next resistance is last week’s high of $4.53 ¼ followed by the 50 day MA at $4.69 ¼. EU 2023/24 corn imports as of Jan. 28th have reached 10.2 mmt, down 41% from YA. POET LLC, the world’s largest corn based ethanol producer, is teaming up with Summit Carbon Solutions to capture, ship and store carbon dioxide from 17 ethanol facilities. This brings a total of 51 ethanol plants to partner with Summit. The goal is to reduce the corn based ethanol industries carbon footprint in order to qualify for Federal tax benefits and be included for production of Sustainable Aviation Fuel. With the US corn balance sheet in desperate need of higher demand to work off some of the excess supplies, SAF appears exactly what bulls need to see.
SOYBEANS
The soybean complex turned sharply higher today with beans $.20 – $.24 higher, meal was up $6 – $9, while oil was 25 – 45 higher. Mch-24 beans traded to a new 7 month low overnight before surging higher posting an outside day up. Next resistance is last week’s high at $12.47 ½. Mch-24 oil traded to a new 8 month low overnight, before recovering. Next resistance for Mch-24 meal is last week’s high at $366.80. Markets quickly reinserted weather premium as confidence is slipping that needed rains will fall in Argentina over the next 7-10 days. Crop stress will be on the rise, particularly across southern Buenos Aires and La Pampa as temperatures hold at much above normal readings. Next chance for widespread beneficial rain is Feb. 7 – 10th, confidence that far out however isn’t particularly high. Conditions across Brazil remain mostly favorable. Key usage figures due out later this week with monthly EIA biofuel production, capacity and feedstock usage data tomorrow, while Dec-23 census soybean crush on Thursday. In addition will used cooking oil continue to cut into bean oil usage. Oil usage fell to a 6 month low in October, down 16.5% from its peak in July-23. Crush is expected to come in at a record high of 206 mil. bu., above the existing record of 201.5 mil. from Oct-23. Estimates range from 204 – 207 mil. Bean oil stocks are expected to jump 11% from Nov-23 to 1.764 bil. lbs. Despite the expected build, stocks would still be down 23.5% from YA levels of 2.31 bil. lbs. Oil stock estimates range from 1.73 – 1.875 bil. lbs. EU 2023/24 soybean imports as of Jan.28th at 6.8 mmt are down 4% from YA
WHEAT
Prices were higher across all 3 classes today with Chicago and KC both $.10 – $.12 higher, while MGEX was up $.06. Mch-24 Chicago closed just above its 50 & 100 day MA’s at $6.04 ¾. Next resistance is LW high at $6.17 ¼. Mch-24 KC closed just above its 50 day MA at $6.29 ¼ with next major resistance at $6.48 ½. Another round of heavy rains are expected for the US gulf coast and Delta region this weekend. Good rains are also expected to extend into much of KS and western NE. A South Korean flour mill has purchased just over 86k mt of various US wheat classes for April/May shipment. Russian wheat exports in Jan-24 are expected to reach 3.7 mmt, down 13% from YA. The Russian Govt. also announced they are placing an import quota on seeds from “unfriendly” countries that include Britain, the EU and the US. A number of US states reported winter wheat crop ratings. Big rating increases were seen in IL, KN, KY, NE, and ND. Lower ratings were seen in MT, OK, SD and TX. 10 of the 11 states that reported ratings are in better shape than YA, most much better. In Kansas, the largest producing state, 54% of the crop is in G/E condition, up 11% from Dec-23 and well above the 21% from YA.
See more market commentary here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
