Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices finished $.02 – $.03 lower after Dec-23 failed to trade above $5.00 overnight. Export sales were good at 39 mil. bu. (36 mil. – 23/24 MY, 3 – 24/25). Heavy rains continue to move slowly across the northern half of the US Midwest causing harvest delays until at least early next week. Minimal delays are expected across the southern half of the Midwest and ND. A dryer outlook is expected for much of the nation’s midsection the last week to 10 days of Oct. YTD commitments are up 14% vs. the revised USDA forecast of up 22%. The BAGE warned that Argentina’s corn acres may not reach their forecast of 7.3 mil. HA (18 mil. acres) if dry conditions persist much longer. For now they left their acreage est. unchanged. Planting progress has reached 19%. Ukraine’s corn harvest has reached 5.8 mmt, vs. only 1 mmt YA. Today the US Climate Prediction Center (CPC) stated there is an 80% chance El Nino conditions will still be active in Mch-24, and 61% chance thru April-24. The CPC went on to state the El Nino event is expected to remain weak, generally associated with a cooler than normal weather pattern for the central Midwest. With minimal change to the global balance sheet in yesterday’s reports, global stocks/use among the 4 largest exporters are still forecast to build to nearly 12%, a 6 year high. Dec-23 corn remains stuck between $4.70-$5.00. SA weather will likely determine the direction of the breakout.
SOYBEANS
The soybean complex was mixed with beans down $.06 – $.10, meal down $3 – $4, while oil was 90 – 100 higher generating support from higher energy prices. Nov-23 soybeans again failed to trade above $13 following yesterday’s supportive USDA reports. Resistance above $13 is the 100 day MA at $13.12 ½. Dec-23 meal surged to a 1 month high overnight, coming within $1 of the $400 level before backing up. Weather models continue to lean towards better prospects for rain across Northern Argentina and WC Brazil the last week of October. These rains are desperately needed to promote planting operations and early crop development. Much above normal rains continue to impact southern Brazil threatening their wheat crop. Export sales at 39 mil. bu. were at the upper end of expectations. YTD commitments at 717 mil. bu. are down 31% from YA, vs. the revised USDA forecast of down 12%. In addition the USDA announced the sale of 117k tons (4.3 mil. bu.) of soybeans and 100k tons of meal both to an unknown buyer. China’s soybean imports from Sept-23 totaled 7.15 mmt, down 24% from Aug-23 and down 7% from Sept-22. YTD imports however are up 14% from YA. India’s vegetable oil imports for Sept fell 17% from Aug. to 1.55 mmt. Ukraine’s sunflower seed harvest has reached 9 mmt, double the YA volume, while soybean harvest has reached 3.8 mmt, vs. only 1 mmt at this point YA. NOPA crush for Sept-23 is scheduled for 11 AM CST on Monday. NOPA members are expected to have crushed 161.7 mil. bu., little changed from the 161.5 mil. bu. crushed in Aug-23 and Sept-22. Despite reduced supplies from the US global production among the top 4 exporters is still expected to reach a record 333 mmt in 2023/24, up 8.6% from YA. Stocks/use among the top 4 exporters is expected to rebound to a 4 year high of 21%.
WHEAT
Prices were mixed with Chicago up $.02 – $.08 with bull spreading noted in spot months, new crop was steady to $.03 lower. KC was $.05 – $.06 lower, while MGEX was down $.01 – $.02. Export sales at 24 mil. bu. were above expectations and a MY high. Demand has responded to the price decline. YTD commitments are still down 9% from YA, vs. the USDA forecast of down 8%. The USDA also announced the sale of 181k tons (6.6 mil. bu.) of SRW wheat to China. The BAGE lowered their Argentine wheat production est. .3 mmt to 16.2 mmt. The USDA held their forecast at 16.5 mmt in yesterday’s report. 42% of the Argentine crop is in poor or VP condition, up from 32% LW. Late Thursday Egypt’s GASC bought 470k tons of wheat in their most recent tender. 300k was from Russia, prices ranging from $276-$279/mt CF, 120k tons from Romania at $278/mt CF, and 50k tons from Bulgaria at $277/mt CF. Tunisia reportedly bought 100k tons of durum wheat between $415-$419/mt CF. Stocks/use among global exporters is expected to drop to 13.5% in 2023/24, the lowest level in over a decade.
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