Written Commentary
Ag Market View for Dec 11.24
December 11, 2024
SOYBEANS
Soybean futures have settled in a 12.50-13.50 trading range. Drop from the highs linked in part to steep drop in soyoil prices, disappointing global soymeal demand/trade and rains across parts of the central and east Midwest. This week, USDA dropped weekly crop ratings to 60 pct G/E vs 62 last week and 70 last year. Some feel ratings could stabilize next week if rains fall across the east and central Midwest. Weekly US soybean exports have slowed. Still some feel that Census to date exports are running 30-40 mil bu above USDA inspection data. This could drop US 2020/21 soybean carryout below 100 mil bu. Sill most doubt USDA will ever print a number below 120. Most estimate US 2021 soybean acres near 88.0 versus USDA 87.6. Most also estimate US June 1 soybean stocks near 763 mil bu vs 1,381 last year. Key to market direction could be if USDA numbers are above or below the average trade guess. Increase trade volatility, Managed fund position limits and daily price range has dropped open interest from peak at 910,000 contracts to 758.500.
CORN
Corn futures traded lower. There was talk that Managed funds may be establishing new short corn and long soybean positions before the June 30 USDA acreage report. Funds are expecting to see USDA increasing US corn acres on the report. This and normal rains over the next 10 days for IA and corn states east and south could push corn futures lower. Market is struggling with the fact US corn 2020/21 and 2021/22 export demand could be higher than USDA last guess. This could eventually drop US 2020/21 corn carryout below 1,000 mil bu. This week, USDA dropped weekly crop ratings to 65 pct G/E vs 68 last week and 72 last year. Some feel ratings could stabilize next week if rains fall across the east and central Midwest. Most estimate US 2021 corn acres near 93.5 versus USDA 91.1. Most also estimate US June 1 corn stocks near 4,014 mil bu vs 5.003 last year. Key to market direction could be if USDA numbers are above or below the average trade guess. Increase trade volatility, Managed fund position limits and daily price range has dropped open interest from peak at 1,978,000 contracts to 1,675,900. One crop watcher dropped Brazil corn crop to 90.0 mmt versus USDA 98.5 and Argentina to 45.0 versus USDA 47.0. 10.5 mmt drop from USDA could add to US export demand. USDA is also estimating that Brazil was expected to export 14 mmt of corn July-Sep. currently there is no corn to load at ports.
WHEAT
Wheat futures are mixed. Increase harvest activity could offer resistance to Chicago SRW and KC HRW prices. Wheat continues to follow corn prices which are lower today. Fact USDA dropped US spring wheat crop ratings more than expected offered support to Minneapolis wheat futures. Early reports is that HRW yields are better than expected but protein is below average. Early SRW yields are also higher than expected. Both US HRW and SRW export demand is less than normal. East Europe and Russia prices are a discount to US. USDA estimated that 17 pct of US winter wheat crop is harvested. TX is 58, OK is 50, KS is 13, MO is 27, AR is 59 and IL is 12. USDA rated the US spring wheat crop 27 pct G/E vs 37 last week and 75 last year. ND is 19 vs 76 last year. Long range weather outlook suggest continued below normal rains and above normal temps for US north plains, Canada prairies and US PNW white wheat states. Increase Managed fund position limits and daily price range has dropped open interest from peak at 93,800 contracts in Chicago and 76,800 in KC.
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