Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were down $.07 – $.08 with spot Dec-23 falling to its lowest level since July-2021. Intraday Dec-23 violated support near $4.55 which represents the Sept-23 low on the weekly chart and is the 100 month MA. Export inspections at only 16 mil. bu. were a new MY low and below expectations. YTD inspections at 286 mil. bu. are still up 25% from YA, in line with the USDA forecast. AgRural estimates Brazil’s 1st corn crop is 83% planted. Late last week the BAGE reported corn plantings had reached 26%, essentially holding steady as farmers focus on soybean plantings. Chinese hog prices plunged nearly 6% on Monday to record low prices as farmers liquidate herds in accordance with the government’s desire to lower their overall hog population. Last week money managers were net sellers of just over 22k contracts extending their short position to 185,502 contracts, their largest short position since July-2020. US harvest progress was reported at 96% complete vs. 99% YA and the 5-year Ave. of 95%.
WHEAT
Prices were down $.12 – $.16 across all 3 classes today with new contracts lows being made for all the Dec-23 contracts. Multi-year lows for all 3 on the weekly charts as well. For Chicago it’s the lowest price since Sept-2020, KC since July-2021, and May-2021 for spot MGEX. US export inspections at 10 mil. bu. were in line with expectations. YTD inspections at 299 mil. bu. are down 23% from YA, vs. the USDA forecast of down 8%. Despite recent Chinese interest in US SRW wheat, it appears we could very well see a 10-15 mil. bu. cut in the USDA export forecast of 700 mil. bu. IKAR notes Russia’s export price for wheat ended last week at $235/mt, up $5 from the previous week. SovEcon stated Russian grain exports last week reached 720k mt, down from 810k the previous week, of which 560k mt was wheat. Last week MM’s were net sellers of just over 10k contracts of KC wheat and nearly 19k contracts of Chicago wheat. The combined short position for all 3 classes surged to just over 183k contracts, within a few thousand contracts of the record large short position just over 1887k. Winter wheat conditions improved 2% to 50% G/E, well above the 34% from YA.
SOYBEANS
The soybean complex was mostly higher in 2 sided trade. Beans were mixed with most contracts within $.01 of unchanged, meal was also mixed with nearby futures $1 – $2 higher with deferred contracts slightly lower, while oil was 40 – 80 higher. Jan-24 beans briefly violated the 50 day MA support at $13.25 ½ before recovering. Spot board crush margins improved $.08 to $2.50 bu., matching a 5 week high. South American weather was pretty much as expected over the weekend with good rainfall totals for much of MGDS, as well as east central Mato Grosso extending east thru central Goias into far western Minas Gerais. Daily chances for scattered, light precipitation is expected much of this week in Brazil, however total accumulations are not expected to offset evaporation. Better prospects for steadier rains are expected in center west and center south regions early next week. Argentina is expected to continue to experience a good mix of sun and rain. Export inspections at 53 mil. bu. were in line with expectations, however were a 7 week low. YTD inspections at 641 mil. bu. are down 11% from YA, vs. the USDA forecast of down 12%. AgRural estimates Brazil’s soybean crop is 74% planted, up from 68% LW however below the 87% pace from YA. So far most production forecasts are coming in above 160 mmt, vs. the USDA forecast of 163 mmt, while still exceeding YA record crop of 158 mmt. Last week MM’s were net sellers of just over 6k contracts of soybeans, while being net buyers of nearly 3,800 oil and 6,400 meal. The MM long position in soybean meal has swelled to 137,803 contracts, the largest since Mch-2023.
See more market commentary here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
