Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
After rejecting trade below $4.70 yesterday, prices were up another $.05 – $.06 today closing near session highs. Next resistance is this month’s high at $4.90 ¼. Open interest was up 14k contracts yesterday suggesting new money coming into the market on the higher trade, not just a short covering bounce. Good rains fell across SC IA and northern IL in the past 24 hours while forecasts offer heavy rains of 1-3” for the northern plains along with much of the central Midwest over the next 5 days. Harvest progress by early next week will likely be limited to the far southwest and eastern corn belt. Much above normal temperatures and little to no rain across west central Brazil thru the end of Sept. threaten to push back soybean plantings. In turn this may threaten their 2nd corn crop plantings to be delayed beyond the optimal time frame of late Jan into Feb-24. Late yesterday Conab forecast Brazil’s 2023/24 production at 120 mmt, well below the USDA forecast of 129 mmt. Ethanol production last week plunged to 980k barrels per day, down from 1,039 tbd the previous week. This was well below expectations and the lowest production figure in 4 months. Only 98 mil. bu. of corn was used in the production process, below the pace needed to reach the current USDA usage forecast of 5.30 bil. bu. Implied gasoline usage last week at 8.410 mil. barrels per day was 1% from LW and this week YA. APK-Inform raised their Ukrainian grain production forecast 1.1 mmt to 54.2 mmt. Corn production is expected to reach 25.6 mmt with 19 mmt being exported. Both estimates are below the USDA forecast of 28 mmt of production and exports at 19.5 mmt. Export sales tomorrow are expected to range from 20 – 35 mil. bu.
SOYBEANS
The soybean complex was mixed with beans $.04 – $.06 higher, meal was up $5 – $6, while oil was 80 – 110 lower. Nov-23 beans continues to hold support above its 100 day MA at $13.05. Oct-23 meal surged above its 100 day MA resistance at $396.10. Next resistance is at its 50 day MA at $403.10. Next support for Oct-23 oil is the Sept low at 60.05. The USDA announced the sale of 120k tons (4.4 mil. bu.) to an unknown buyer. Conab’s 2023/24 soybean production forecast for Brazil at 162.4 mmt is very near the USDA est. of 163 mmt. Chinese customs data confirmed their Aug-23 imports at 9.36 mmt, down 3% from July however up 31% from Aug-22. YTD imports are up 17% from YA. In order to reach the revised USDA import forecast of 102 mmt for the 2022/23 MY, imports in Sept-23 will need to reach 8.29 mmt, up 7% from Sept-22. Spot board crush margins fell $.04 today to $2.21 bu. While down $.60 from their recent peak, they remain historically strong. Soybean oil product value fell to 43.3%, a 2 month low. Export sales tomorrow are expected to range from 22 – 36 mil. for beans, (8) – 8k tons oil, and 100 – 550k tons of soybean meal.
WHEAT
Prices are mixed with Chicago and MGEX up $.03 – $.05 higher while KC futures were within $.02 of unchanged. Ukrainian Pres. Zelenskiy is scheduled to visit Washington DC on Thursday when Pres. Biden is expected to announce another military aid package. Algeria reportedly purchased 600k mt of wheat between $274-$275/mt C&F. Egpyt’s GASC bought 120k mt of Romanian wheat at $272/mt C&F. SovEcon lowered their 2023 Russian production forecast 500k mt to 91.6 mmt, still well above the USDA forecast of 85 mmt. APk-Inform raised their Ukrainian wheat production forecast to 21.5 mmt with exports expected to reach 12.5 mmt. This compares to the USDA forecasts of 22.5 mmt and 11 mmt respectively. Reports suggest the drought impacting Australia’s wheat production may restrict their exports to only 16-17 mmt in 2023/24, roughly half of what they sold abroad in 2022/23. Export sales tomorrow are expected to range from 9 – 19 mil. bu.
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