Written Commentary
Ag Market View for July 26.24
July 26, 2024
SOYBEANS
Soybean ended higher. Talk of tighter US supply and increase inflation scares helped rally prices. Ag Rural estimated Brazil’s soybean planting at 86 pct complete vs 91 last year. Unplanted soybean area is in RGDS (due to dryness) and in NE Brazil (due to excessive wet conditions). Long range Argentina forecast is drier which may also be supportive. Sharply higher US wheat futures and Matif wheat futures offered support to soybean futures. Talk that USDA NASS could drop US soybean yield in January and the forecast of drier Argentina weather is supportive. Most analyst estimate US 2021/22 soybean carryout near 400 mil bu vs USDA 340. This due to lower exports. Weekly US soybean exports were near 62 mil bu vs 84 ly. Season to date exports are near 667 vs 913 ly. Bulls need a South America weather problem to push above key resistance.
CORN
Corn futures traded higher. Higher US cash domestic basis and higher wheat futures offered support. CZ bounced off Fridays low near 5.68. 5.80-5.86 is key resistance. Last week Managed funds added 21,000 corn contracts. All grains were up 84,000 contracts or largest weekly increase since May. Some feel funds may want to add to longs on talk of higher inflation, lower US 2022 acres and tight World supplies. Most analyst estimate US 2021/22 corn carryout near 1,290 mil bu vs USDA 1,493. Weekly US corn exports were near 24 mil bu vs 33 ly. Season to date exports are near 299 vs 366 ly. Argentina and Ukraine is offering export corn to buyers. China has been and aggressive buyer if EU feed wheat, Ukraine corn and US sorghum. CZ is between 5.66 support and 5.86 resistance. Bulls need a South America weather problem to push above key resistance. Our weather guy could see some ridging next spring across KS, NE, S IA and MO. This ridge could eventually expand south and east. There is a small chance it could even expand north. There could be another ridge on the US SE coast keeping that area dry this winter, This ridge also has a small chance to expend west and merge with the SW ridge like 1988.
WHEAT
Wheat futures rallied sharply. WZ and KWZ made new contract highs on concern that continues wet weather will delay Australia harvest and reduce quality. USDA November World wheat report was bullish due to increase World wheat trade and record low World exporters stocks to use ratio. Any increase in wheat demand or lower supply could push wheat futures higher. Higher Jan Russia export tax near $100 could either force World wheat prices to rally to slow demand or higher Russia wheat prices could increase US exports. Weekly US wheat exports were near 6 mil bu vs 13 ly. Season to date near 299 vs 366 ly. Some feel that end users remain short for 2022 needs and their need to buy could support futures on breaks. KWZ-CZ made new highs since 2014 near 2.85.all time highs were 6.26 in 2008. Most feel KWZ cools test 9.00 on tight global wheat supplies. KWZ could also have a second higher rally in 2022 if US south plains and Midwest weather is drier than normal.
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