Written Commentary
Ag Market View for July 26.24
July 26, 2024
SOYBEANS
Soybeans, soymeal ended higher. Soyoil ended lower. As expected, US Fed Chairman comments today was more dovish. This rallied US stocks quickly and offered support to most commodities. SF traded over 14.75 and SMF over 417. Some of the buying was linked to hope that China may eliminate some of its strict Covid lockdown policy. There was also talk that US Congress could pass legislation to avoid a US RR strike. Trade is also waiting for EPA to propose the amount of renewable fuels that oil refiners must blend their 2023 fuel mix. Argentina weather remains dry. Most of Brazil weather is favorable. Argentina farmer is a slow seller of cash despite the new soya peso deal. US domestic soymeal basis is weakening as US soybean crush increases. Farmer consultant suggested US farmers increase 2022 crop cash sales and 2023. Normal World 2023 weather could increase US 2023/24 soybean carryout to closer to 400 mil bu which could be negative futures. Trade estimates US weekly soybean export sakes near 550-1,000 mt vs 690 last week.
CORN
Corn futures ended higher. CH ended near the upper end of the recent trading range. Open interest continues to slide lower. This may be due to lack of farmer selling and reduced managed fund longs due to lower demand for US export. Talk of increase US south plains wheat feeding could also lower corn demand. Weekly US ethanol production was down from last week and last year. Stocks were up from last week and last year. Drop is domestic driving could be slowing ethanol production. This could drop final corn use for ethanol 50 mil bu. There was also talk that US Congress could pass legislation to avoid a US RR strike. Trade is also waiting for EPA to propose the amount of renewable fuels that oil refiners must blend their 2023 fuel mix. Argentina weather remains dry. Most of Brazil weather is favorable. Argentina farmer is a slow seller of cash. Farmer consultant suggested US farmers increase 2022 crop cash sales and 2023. Normal World 2023 weather could increase US 2023/24 corn carryout to closer to 2,000 mil bu which could be negative futures. Trade estimates US weekly corn export sales near 475-1,000 mt vs 1,850 last week.
WHEAT
Wheat futures are trying find support on talk of additional winter wheat feeding in the West, oversold tech picture and record Managed fund net Chicago wheat short. What happens with RR and Congress will be key. Sentiment today is Congress will intervene. HRW basis continues slippage to end the month with millers having good stocks, RR strike unknown and talk that EU wheat is being imported to US East Coast. SRW basis firmer given lack of farmer selling and tight stocks. NSW basis remains firm with RRs 30-45 days behind on applications. Argentina and US south plains remain dry. Russia wheat export prices still lowest to World buyers. Trade estimates US weekly wheat export sakes near 300-625 mt vs 511 last week.
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