Written Commentary
Ag Market View for July 26.24
July 26, 2024
CORN
Prices were down $.10 – $.12 despite Sept 1st stocks coming in below expectations. For the week prices were little changed. Earlier today the USDA announced the sale of 224k tons (9 mil. bu.) of corn to Mexico. Last year’s crop was cut by 15 mil. bu. to 13.715 bil. due to a 92k acre cut in harvested acres. 50k of those acres came out of Iowa. Last year’s average yield actually ticked up .1 bpa to 173.4 bpa. Much of the nation’s midsection will be dry this weekend with the exception of the northern MN and WI. Showers will begin to fill in the western corn belt by early next week providing a bit of a harvest break. Harvest progress in the eastern corn belt will pick up over the weekend following recent showers. Above normal temperatures are expected across the entire Midwest thru the middle part of next week. Dec-23 corn was able to hold above its recent low of $4.67 ¾.
SOYBEANS
The soybean complex was lower across the board with beans off .18 – $.26, meal was down $6 – $16, while oil was 110 – 120 lower. Too much rain will continue to plague Southern Brazil, while west central areas are expected to receive lite, scattered coverage thru early next week. Additional rains are needed in WC states to promote soybean plantings. No meaningful change to drought conditions in Argentina over the next week. There were no deliveries against Oct-23 bean oil while 275 contracts were tendered against Oct-23 meal. The 2022 US soybean crop was lowered 6 mil. bu. to 4.270 bil., in line with expectations. Harvested acres were cut 167k with just over half (90K) of the acreage reduction coming from KS. Despite the lower crop size, Sept 1st stocks at 268 mil. bu., were up 18 mil. from the Sept-23 WASDE report and 26 mil. above expectations. Nov-23 soybeans have slumped to a 3 month low. Next support is the late June low at $12.56 ¾. Dec-23 oil has also slipped to a 3 month low. Next support is 54.65. Dec-23 meal held support above last month’s low of $379. Today’s stocks figure helps explain why spot soybeans had fallen over $1 per bu. in the past month despite poor finishing weather and declining yield expectations. The weakening spreads also hinted at higher than expected supplies. Despite today’s bearish stocks data US inventories remain historically tight, however with weak demand and SA planting season just starting we continue to witness speculative long liquidation. Without a pickup in exports soon the USDA will likely be forced to again lower their forecast, whenever the next WASDE report may be.
WHEAT
All 3 classes were down $.20 – $.38 as all US wheat production was increased 78 mil. bu. to 1.81 bil., well above expectations for a 5 mil. bu. reduction. Winter wheat was increased 21 mil. bu. to 1.248 bil. slightly above the range of est. Planted acres were cut just over 300k while harvested acres were slashed just over 800K. Harvested acres in KS alone were cut 750K. With the huge increase in abandoned acres the average yield shot up to 50.6 bpa, a 3 year high. The percentage of abandon acres nearly reached 37%, a record high. By class changes to WW were HRW +16 mil, SRW +9 mil., and white winter -5 mil. The huge surprise was Spring wheat production jumping 55 mil. bu. to 505 mil. vs. expectations of down 4 mil. bu. We were looking for a 2 mil. bu. decline. By state yield changes for spring wheat were ID +2, MN +12, MT +2, ND + 3.5, SD + 13, and WA -7. Despite the huge upward revision to production Sept 1st stocks at 1.780 bil. were only 6 mil. above the average trade guess. Chicago and MGEX Dec-23 both made new contract lows today. Spot Chicago futures are at their lowest level since Oct-20. Lowest for MGEX since May-21. Today’s low KC Dec-23 at $6.62 was the lowest level since Sept-21. The contract low at $6.21 was from July-21.
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