Written Commentary
Ag Market View for July 26.24
July 26, 2024
SOYBEANS
The soybean complex was mixed with beans $.02 – $.04 higher, meal was up $3 – $5, while oil was down 65 – 100. Deliveries against Nov-23 soybeans were 438 contracts with the next available date Sept. 13th. O.I. for Nov-23 was down 44,384 contracts yesterday to just over 7k. Jan-24 soybeans held support right at $13 in early trade, which is just above last week’s low at $12.97 ½. Above normal rains are expected across the already saturated soils in Southern Brazil causing further flooding potential and the need for replanting. Hot temperatures with scattered showers in NC Brazil this week. While gradual improvement is expected next week, there are still no widespread soaking rain events thru the first 10 days of November. Conditions in Argentina continue to improve. The USDA announced the sale of 240k tons (9 mil. bu.) of soybeans to Mexico. Dr. Michael Cordonnier lowered his Brazilian soybean production est. by 2 mmt to 160 mmt on anticipation of lower yield and potentially lower acres due to the need to replant. Too wet in the south, to hot/dry in the WC. He has a steady to lower bias going forward. The current USDA forecast is 163 mmt. Census US crush for Sept-23 will be released after the close tomorrow. The EIA showed no change to biodiesel of renewable diesel capacity in Aug-23. Biodiesel capacity was steady at 2.080 bil. gallons with renewable diesel holding at 3.704 bil. Despite no change in August, renewable diesel capacity is up 74% from Aug-22. Soybean oil used in the production of biofuels actually fell 6% in August to 1.197 bil. lbs., however is up 29% from Aug-22. With 1 month of data left for the 2022/23 MY bean oil usage for biofuel production has reached 11.283 bil. lbs. up 20% from YA, vs. the USDA forecast of up 17%. To reach the current USDA forecast usage of 12.10 bil. lbs. usage in Sept-23 will have to fall to 817 mil. lbs, a level not seen since June-22. After raising bean oil usage for biofuel production by 300 mil. lbs earlier this month to 12.1 bil. they are likely still 300 – 400 mil. lbs. to low. Sizeable jumps in tallow and yellow grease led to the declined usage of soybean oil in Aug-23.
CORN
Prices were steady to $.02 higher. Dec-23 corn had a $.09 ¼ range last Wednesday and so far hasn’t been able to break out of it. Resistance is at the 50 day MA at $4.85 with support at last week’s low of $4.76 ¾. There were no new export announcements today. US harvest progress advanced 12% last week to 71% complete, just behind YA pace of 74%, however ahead of the 5-year Ave. of 66%. Some modest delays noted in the ECB. Only light moisture is expected around the Great Lakes region this week, otherwise harvest will be hitting the home stretch across much of the nation’s midsection. Dr. Michael Cordonnier lowered his Brazilian corn production est. 2 mmt to 123 mmt, citing the likelihood for reduced plantings due to delays and low domestic prices. He maintains a lower production bias going forward. The current USDA forecast is 129 mmt. He held his Argentine forecast steady at 52 mmt, below the USDA forecast of 55 mmt. A South Korean feed mill bought 133k mt of optional origin feed corn for late Feb-24 to early Mch-24 delivery at an average cost just over $255/mt CF. EU corn imports since July have reached 5.63 mmt, down 41% from YA. Estimates for tomorrow’s EIA weekly ethanol production range from 1,030 tbd – 1,052 tbd, vs. 1,040 tbd the previous week.
chart provided by QST
WHEAT
Prices were lower across all 3 classes today with Chicago and MGEX down $.07 – $.10 while KC was $.15 – $.16 lower. New contract lows were made in Dec-23 MGEX while spot KC has reached its lowest level since July-21. US winter wheat plantings advanced 7% to 84% complete, slightly below YA and the 5-year Ave. 47% of the crop was rated G/E, well above the initial ratings of 28% YA as drought conditions across the US southern plains have been fallen dramatically from YA. Ukraine’s Ag. Minister reports winter wheat plantings have reached 5.34 mil. HA of which 3.73 mil. were winter wheat. Tunisia reportedly bought 100k mt of optional origin soft wheat at an average price of just over $269/mt CF. Wire services are reporting that China will import a record amount of wheat in 2023 with totals likely to reach 12 mmt. Imports from Australia have totaled 6.4 mmt with another 1.8 mmt coming from Canada. EU soft wheat exports since July have reached 9.6 mmt, down 23% from YA.
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