Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
A late rebound enabled prices to close $.03 – $.04 higher. There were 3 contracts put out for delivery against May-24. Both July-24 and Dec-24 both rebounded after trading below their respective 50 day MA’s. As expected the updated GREET model does enable corn based ethanol to be eligible for tax credits in the production of SAF as long as the farmers can show the corn was produced in a climate friendly manner: no till, precise fertilizer applications and the use of cover crops. EIA data showed weekly ethanol production rose to 987 tbd, above expectations however below the pace needed to reach the USDA corn usage forecast of 5.40 bil. bu. Stocks dipped to 25.5 mb, the lowest since early Feb-24. Ethanol stocks slipped to 25.5 mb, the lowest since early Feb-24. Implied gasoline usage improved 2.3% LW to 8.618 mbd, same as week YA. Census corn usage in March at 469 mil. bu. was up 5% from Feb-24 and up 7.5% from Mch-23. After an upward revision to the Feb-24 usage, YTD consumption has reached 3.187 bil., up 6.8% from YA, vs. the USDA forecast of up 4.3%. To reach the current USDA forecast usage April thru Aug. will need to reach 2.213 bil. up less than 1% from YA.
SOYBEANS
The soybean complex was mixed with beans up $.05 – $.10 closing near session highs, meal was $2 – $4 lower, while oil rebounded to close up 20 – 30. July-24 beans rebounded before seriously challenging the April low at $11.45 ¾. Meal was pressured from the Argentine port strike being settled. Inside trading day for July-24 oil. Spot board crush margins plunged $.15 today to .66 ¼ bu., an 11 month low. Flooding rains continue to delay the remaining soybean harvest in RGDS in Southern Brazil. With an estimated 4-6 mmt of soybeans still in the field, additional weather premium seems warranted. Little to no rain across the central and northern growing regions as their 2nd corn crop advances toward maturity. In the US rains the remainder of the week to favor East TX and the Gulf coast straight north into IA and Eastern NE. Planting delays are likely for the central Midwest while the ECB should be making good progress this week. Brazil’s bean exports are expected to reach 13.62 mmt in April, up 1 mmt from Mch-24 however below the 14.34 mmt exported in April-23. US soybean prices remain above SA offers thru July. Census crush in March at 203.7 mil bu was below expectations of 206 mil. and failed to establish a new record monthly high. Cumulative crush in the first 7 months of the 23/24 MY has reached 1.374 bil. bu. up 5% YOY vs. the current USDA forecast of up 4%. To reach the current USDA forecast of 2.30 bil bu cumulative crush over the last 5 months of the MY would have to reach a record 905 mil bu, however this is only up 1.4% from YA. Bean oil production for the month was a record high at just over 2.405 bil. lbs. Stocks at the end of March increased 10% from Feb-24 to 2.369 bil. above expectations, however still down 1% from YA. Export sales tomorrow are expected to range from 5 – 25 mil. bu. for beans, 150 – 400k meal, and 0 – 10k tons of oil.
WHEAT
Prices are lower across all 3 classes at midday. KC is the bearish leader with prices down $.10 – $.12, Chicago is $.05 – $.07 lower, while MGEX is down $.02 – $.03. Chicago July-24 has held above yesterday’s low and very close to its 100 day MA. Not a whole lot of support for July-24 KC until 100 day MA at $6.02 ½. MGEX July-24 has surged to a $.76 premium over KC, up $.36 from early this week. Some showers are expected to fill in the western half of KS over the next 5 days providing some relief. Beneficial rains are expected across portions of Southern Russia and Eastern Ukraine, however coverage will be spotty. Ukraine’s wheat exports in April totaled 1.9 mmt. The USDA FAS office expects Australia’s wheat crop in 2024/25 at 25.8 mmt, down slightly from 23/24, however they do see their exports falling 3 mmt from the current USDA 23/24 forecast to 17.5 mmt. Look for US export sales to reach 5 – 20 mil bu in tomorrow’s report.
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