Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were $.01 – $.03 higher today with spreads firming. Support for July-24 is at the 50 day MA, currently $4.51 ¾ with resistance at the May high of $4.75 ½. Support for Dec-24 is at $4.74 ½ with resistance at the May high of $4.96 ¾. Heavy rains fell in the past 24 hours in IA, MN, and WI while IL and much of the ECB missed out. Good news for the 7.2 mil. acres of corn left to plant in IL, IN and MI as of Monday’s crop progress report. Bad news for the 5.6 mil. acres left in IA, MN and WI. A few more good days of planting are expected for the ECB before 1-2” rains are forecast for the Memorial Day weekend. AgroConsults forecast Brazil’s 2nd corn crop at 96.7 mmt, while down 10.5% from YA it is a full 10.55 mmt above Conab’s 2nd crop est. of 86.155 mmt. Ethanol production rebounded to 1,019 tbd last week, up from 1,000 tbd the previous week and up 3.7% from YA. Production was in line with expectations however below the pace needed to reach the USDA corn usage forecast of 5.450 bil. bu. There was 102 mil. bu. of corn used in the production process, or 14.6 mil. bu. per day, below the 15.27 mbd needed to reach the USDA. Ethanol stocks slipped to 24.2 mil. barrels in line with expectations however above the 22.0 mb from YA. Export sales tomorrow are expected to range from 30 – 65 mil. bu.
SOYBEANS
Prices were higher across the entire complex today. Beans rose $.05 – $.10 as spreads firmed, meal made new highs late closing $4 – $6 higher, while oil sold off closing slightly higher. July beans stopped just shy of making a new high for the week. Longer term support is at the 50 day MA at $12.00 ½ with resistance at the May high of $12.56 ½. Nov-24 beans remains in a $11.95 – $12.30 trading range. First resistance for July-24 meal is last week’s high of $381.70. July-24 oil reached a new 5 week high however stopped shy of its 100 day MA at 46.83 before pulling back. More rain is expected for RGDS in Southern Brazil thru the end of the week followed by a dryer trend into early June. Today’s forecast is showing less rain extending into MGDS and Parana thru the upcoming weekend. Except for NE Argentina, a dryer pattern is expected to hold across much of country favorable for harvest progress. Market will want to see some indication from the USDA of recent Chinese purchases. Spot board crush margins rose another $.04 to $.90 ½ bu. with soybean oil PV dipping just below 38%. Brazil’s soybean exports in May are expected to reach 13.83 mmt, down from the previous forecast of 14.13 mmt and if realized would be down 4% from May-23. Cogo, a local consulting firm in Brazil forecast soybean losses due to flooding in RGDS will reach between 2.5 – 3 mmt, with production falling to 20 mmt. Look for export sales tomorrow to range between 10 – 28 mil. bu. of soybeans, 200 – 550k tons of meal and 0 – 25k tons of oil.
WHEAT
Prices turned lower across the board after all 3 classes made fresh highs in overnight trade. Chicago was down $.04 – $.07 while KC and MGEX were $.02 – $.04 lower. July Chicago reached a fresh 9 month high with next major resistance at $7.77, the July-23 high on the weekly chart. July-24 KC reached an 8 month high with next resistance at $7.50. July-24 MGEX has reached a 5 month high with resistance at $7.67. Mostly dry for the far WCB and SW plains in the near term however better prospects for rain is advertised for closing days of May. Southern Russia, eastern Ukraine and western Kazakhstan are expected to remain in a dryer than normal pattern into early June. Tunisia reportedly bought 100k mt of soft wheat from their recent tender paying $273.69/mt CF. The Illinois Wheat Association crop tour results from Day 1 showed an average yield of 104 bpa, up from YA ave. at 97.1 bpa. The USDA’s initial forecast for IL in 2024 is 83 bpa, down slightly from YA record yield of 87 bpa. Export sales tomorrow are expected to range from 5 – 25 mil. bu.
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