Written Commentary
Ag Market View for July 26.24
July 26, 2024
MORNING OUTLOOK
Grain calls are mixed to lower. SU is near 14.51. SX is near 13.99 SMU is near 383.6. BOU is near 62.87. CU is near 5.92. CZ is near 5.79. WU is near 6.52. KWU is near 6.19. MWU is near 8.38. US stocks are mixed to lower. Crude is higher. Saudi Arabia and UAE cannot agree on production increases. Gold is higher.
The weekend was most dry over much of the US Midwest. Rains are starting to move into the dry Dakotas today. These rains are forecast to move across parts of MN and IA this week. More rain could fall across the NW Midwest early next week. These rains could help corn and soybean crops there. The long range maps build a high pressure ridge in the north plains and NW Midwest late next week.
Most looks for weekly corn crop ratings to drop 1-2 pct from last week 64. Soybean ratings could drop 1pct from 60. Spring wheat could drop 1-2 pct from last week 20. US winter wheat harvest to be near 49 pct. One crop watcher dropped his US corn yield to 175.5 and soybean 50.0. Noted 1.2 million increase corn acres are in dry states of ND,SD and MN from NASS March est. ND soybean acres up 200 thousand.
Corn futures should be supported by NASS low corn acres estimate. US record corn yield was 176.6. USDA 2021 trend yield is 179.5. Most doubt US yield will be over 176. US 2020/21 corn demand could be 100 mil bu above WOB. 2021/22 crop could be down 120 mil bu and demand could be up 300 mil bu. This could suggest a US 2021/22 carryout near 900 vs WOB 1,357. Lower Brazil corn crop could offset talk that in 2021/22 China make take only 20 mmt of corn imports vs 28 this year. Brazil now est 2021 corn exports at 20 mmt vs 33 ly.
NASS drop in US soybean acres offered support. US Ag China Ag attache increased China soybean imports to 102 mmt. Some feel WOB soybean yield near 50.8 could be too high if US NW Midwest is dry in August. US soybean 2021 crop could be down 30 mil bu. Demand could be up 20 mil bu. Final carryout could be closer to 100 that WOB 155.
Dry summer could still support MWU to near 9.00-9.50. This despite talk of higher EU and Black Sea wheat crops. Some feel US 2012 wheat crop could be near 1,800 vs NASS 1,898. This could suggest a US carryout closer to 675 than WOB 770.
On Friday, Managed funds were net buyers of 17,000 contracts of SRW Wheat; 17,000 soybeans, 2,000 soyoil, and sold 10,000 Corn and 9,000 soymeal. We estimate Managed Money net long 4,000 contracts of SRW Wheat; long 268,000 Corn; net long 96,000 Soybeans; net long 42,000 lots of Soymeal, and; long 48,000 Soyoil.
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