Written Commentary
Ag Market View for May 17.24
May 17, 2024
CORN
Prices were mixed from down $.02 in old crop to up $.01 in new crop. July-24 traded to a fresh 4 month high before backing up. Upside target of $5.03 represents a 38% retracement from June-23 high to Feb-24 low. Dec-24 also reached a fresh 4 month high. A dryer trend will evolve over the WCB in coming days, while weather is expected to remain more active in the central and ECB. Planting progress only reached 36% as of Sunday, which was below expectations of 40%. Plantings now trail the YA pace of 42% and the 5-year Ave. of 39%. Emergence has reached 12%. US 23/24 ending stocks are expected to drop roughly 25 mil. bu. in Friday’s USDA WASDE report, in line with our forecast. New crop production is expected to reach nearly 14.90 bil. bu. based off updated USDA acreage data. Ending stocks are expected to grow to 2.282 bil. Dr. Michael Cordonnier held his Brazil forecast unchanged at 112 mmt, however lowered his Argentine forecast another 2 mmt to 47 mmt, well below the USDA est. of 55 mmt. Tomorrow’s EIA report is expected to show ethanol production range between 990 – 1,050 tbd last week, vs. 987 tbd the previous week.
SOYBEANS
Prices were mixed with beans down $.02 – $.03 in old crop, up $.05 – $.08 in new crop. Meal was $3 – $4 lower, while oil closed with gains between 65 – 75. July beans jumped to its highest level since late Jan-24, with next resistance is $12.59. July-24 tested and held support at the March high of $12.40. Old resistance is now support. Fresh 4-month high for Nov-24 beans with next resistance at the New Years gap between $12.37 – $12.44 ½. July-24 meal surged to its highest level since late Dec-23 before pulling back. Resistance for July-24 oil comes in at last week’s high just below $.46. While the heaviest of rains are over, on and off shower activity is still expected across RGDS this week keeping flooding concerns elevated with additional crop losses possible. Lite rain is expected in week 2 of the outlook for dry areas in central Brazil providing limited relief to their 2nd corn crop. Argentina is expecting a good mix of rain and sunshine, favorable to late crop development however another potential frost late this week and again early next week will need to be monitored for potential crop impact. Spot board crush margins were unchanged today at $.86 bu. however bean oil PV gained nearly half a percent to 36.7%. Soybean plantings at 25% were below expectations. Little change is expected for old crop stocks which sit at 340 mil. bu. New crop production is expected to reach 4.430 bil. bu. which if realized would be 2nd only to the record crop in 2021 at 4.465 bil. Ending stocks are expected to rise to 439 mil. bu. Our ending stocks is lower due to expected higher demand anticipating further production cuts from SA. Egypt’s GASC is seeking an undisclosed amount of vegetable oil in a tender that closes Thurs. May 9th with delivery expected in June/July.
WHEAT
Prices were lower across all three classes however all settled well off session lows. Chicago and MGEX were down $.04 – $.06 while KC was $.09 – $.11 lower. Chicago July-24 rejected its first move back above $6.50. Next resistance is at the Dec-23 high at $6.66. July-24 KC was not able to trade above yesterday’s high at $6.79. A hard freeze in Eastern Ukraine and SW Russian growing regions late this week may threaten developing spring crops. US WW ratings firmed 1% to 50% G/E, in line with expectations. Overall conditions remain the highest since 2020. 43% of the crop is headed, vs. 5-year Ave. of 32%. Spring wheat plantings advanced 13% to 47% vs. YA at only 21% and the 5-year Ave. of 31%. New crop stocks expected to swell to 782 mil. bu. which if realized would be a 4 year high. Jordan passed on their recent tender for 120k mt of feed wheat, citing prices being too high. Helping provide the rebound in prices was Stats Canada reported end of March stocks at 11.756 mmt, well below the 13.9 mmt from YA and below expectations of 12.2 mmt. Egypt’s GASC also announced they are seeking wheat for June delivery in a tender that closes tomorrow.
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