Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
After trading to new contract lows prices recovered closing $.03 – $.04 higher. Support below the market for spot Mch-24 is $4.47. Mch-24 failed to form a key reversal day. Most agricultural commodities were higher led by strength in wheat and bean oil as markets stage a “Turnaround Tuesday”. While there were no new announced export sales today, the Nov-23 census data showed exports were above the weekly inspections pace. Corn exports in Nov-23 reached 141 mil. bu. above the 111 mil. from Oct-23 and well above the 96 mil. from Nov-22. In the 1st Qtr. of the 2023/24 MY cumulative exports have reached 376 mil. bu., while up 34% from YA they represent 18% of the USDA forecast, slightly below the historical average of 19%. Census exports are running 44 mil. above the pace of inspections thru Nov-23. South Korean feed buyers have reportedly purchased 200k mt of optional origin feed corn at an average price just over $250/mt CF. Algeria is seeking up to 120k mt of Argentine feed corn for shipment between Jan. 15th and Feb. 15th. EU corn imports thru Jan. 7th have reached just over 9 mmt, down 43% from YA. History shows a lean towards a bullish reaction to Friday’s USDA data. Since 2000 spot corn has closed higher on report day 58% of the time. 1 week after the report prices were higher 63% of the time. .
SOYBEANS
The complex was mixed in 2 sided trade. Bean prices finished $.03 – $.06 higher after spot Mch-24 rejected early trade to a new 7 month low. Meal was steady to down $1 with Mch-24 recovering after also establishing a fresh 7 month low. Following yesterday’s technical recovery bean oil was once again the leader of the complex closing 60 – 70 higher. While spot board crush margins improved only $.02 to $.93 ¼ bu., bean oil product value improved to 39.7%, a 3 month high. Conditions is SA will remain mostly favorable thru mid-January. Dry pockets that have developed in interior southern Brazil are expecting beneficial moisture by this weekend. Census exports in Nov-23 were 274 mil. bu., down from 348 mil. in Oct-23 and also below the 355 mil. from Nov-22. Cumulative bean exports Sept thru Nov-23 have reached 713 mil. bu., 26 mil. above the pace of inspections, however down 10% from YA. A South Korean feed group reportedly purchased between 45 – 60k mt of soybean meal from SA origin for $457/mt CF for late June-24 delivery. Deral, a crop agency in Parana Brazil, reports 71% of the state’s soybean crop is in good condition, down from 86% LW. 5% of the crop is poor, up from only 1% LW. Parana on average harvests 15% of the nation’s crop. History shows a lean towards a bullish reaction to Friday’s USDA data in soybeans as well. Since 2000 spot soybeans have closed higher on report day 63% of the time. 1 week after the report prices were higher 58% of the time.
WHEAT
rices were higher across all 3 classes today with Chicago and KC up $.11 – $.14, while MGEX pulled back to close only $.02 – $.03 higher. Mch-24 Chicago briefly traded above its 100 day MA of $6.11 before pulling back. The first of a few major winter storms is currently moving thru the nation’s midsection leaving a mix of heavy rain and snow in its path. Bitter cold is expected to dip down from Canada with weekend low temperatures reaching zero as far south as the Kansas/Oklahoma border. Daily lows of 15 – 25 below zero will be common across the northern plains which could damage winter wheat crops that do not have a heavy blanket of snow. Better snow coverage exists across the southern plains from this week’s winter storms. US census wheat exports from Nov-23 at 43 mil. bu. were up from 40 mil. in Oct-23 however well below the 50 mil. from Nov-22. YTD census sales have reached 312 mil. bu., down 26% from YA. Egypt’s GASC reportedly bought 420k mt of wheat from Russia and Ukraine combined. Prices ranged from $265/mt on a FOB basis, to $286/mt CF. History also shows a lean toward a bullish report on Friday for wheat as well. Since 2000 spot Chicago wheat has closed higher 71% of the time.
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