Written Commentary
Ag Market View for July 26.24
July 26, 2024
SOYBEANS
The soybean complex was mixed with beans up $.02 – $.04, meal up $2 – $4, while oil was 185 – 215 lower. Nov-23 held support above the Aug-23 low at $12.82 ¼. Resistance is at the 100 day MA at $13.05 ¾. Oct-23 oil violated support at the Aug-23 low at 59.40. Next support is the 100 day MA at 57.95. Spot board crush margins slid $.16 to $2.11 bu., a 2 month low. Soybean oil product value fell to 42.8%, a 3 month low. AgRural reports Brazilian soybean plantings have nearly reached 2%, up slightly from YA. Export inspections at 18 mil. bu. were in line with expectations. YTD inspections have reached 47 mil. bu. up 6.5% from YA, vs. the USDA forecast of down 10%. Last week money managers were net sellers of nearly 28k contracts of soybeans, reducing their long position to 45,832 contracts, their smallest position in just over 3 months. MM selling in soybean meal at just over 6k contracts was pretty much offset by buying in soybean oil. The combined MM long position in the soybean complex slipped to just under 149k contracts, also the smallest in 3 months.
CORN
Prices jumped the last hour of trade to closed $.03 – $.04 higher. Dec-23 stopped just shy of last week’s high or $4.83. Next resistance is this month’s high of $4.90 ¼ followed by the 50 day MA, currently $4.98. Healthy rains over the weekend led to harvest delays across much of the central Midwest. Better harvest progress was likely made in the far SW and eastern corn belts. This AM the USDA announced the sale of 1.661k mt of corn (65.5 mil. bu.) to Mexico. 41.5 mil. was for the current 2023/24 MY, while 24 mil. was for the 2024/25 MY. This morning’s export inspections at 26 mil. bu. were in line with expectations. YTD inspections have reached 77 mil., up 16% from YA, vs. the USDA forecast of up 23%. Friday’s CFTC report showed money managers had sold another 10k contracts, extending their short position to nearly 145k, their largest short position since Aug-2020. The index funds sold another 10,400 contracts reducing their long position to only 248,693 contracts, their smallest position since Jan-20. Friday’s COF report showed cattle inventories at 98% of YA, in line with expectations.
WHEAT
Prices were mixed with Chicago up $.09 – $.10, KC was $.02 – $.03 better, while MGEX was steady to lower. Chicago Dec-23 continues to hold support above its contract low of $5.70. Upside will likely be limited to this month’s high of $6.07 ½ prior to Friday’s report. Dec-23 KC made a new contract low before rebounding. Export inspections at 16.5 mil. bu. were also in line with expectations. YTD inspections at 207 mil. bu. are down 28% from YA, vs. the USDA forecast of down 8%. India’s food secretary maintains his country has enough wheat supplies to prevent shortages. He went on to state the Govt. may sell additional volumes in the open market to control domestic prices. IKAR analysts note Russian wheat prices traded $235/mt FOB late last week, unchanged from the previous week. SovEcon raised their Russian wheat export forecast for Sept to 5.1 mmt, up from 4.9 mmt and above the 4.2 exported in August. Last week MM’s were net sellers of 12,666 contracts of Chicago wheat, while buyers of 818 KC wheat. The MM short position in Chicago has increased to nearly 97k contracts, a 3-month high.
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