Written Commentary
Ag Market View for July 26.24
July 26, 2024
MORNING OUTLOOK
Grains are lower. SF is down 12 cents and near 14.41. SMZ is near 421.1. BOZ is near 75.19. CZ is down 4 cents and near 6.83. WZ is down 13 cents and near 8.32. KWZ is down 9 cents and near 9.30. MWZ is down 7 cents and near 9.42.
Wheat and corn futures have turned lower after Russia U turn and now allowing Ukraine grain vessels to ship. There are 7 vessels with 290 mt of grain leaving Ukraine today. Ukraine grain exports could be the sole factor driving wheat markets at the moment. Putin’s explanation for the decision was that Moscow had received sufficient written guarantees from Ukraine that they would not use the corridor for strikes against Russia. But Ukraine has still neither confirmed nor denied this. There have still been no statements from any of the participants confirming that the deal will indeed extend beyond Nov 19. Without a clear agreement to this effect, inbound vessels were due be stopped going beyond the Bosphorus from this weekend for security reasons. And there is the G-20 on November 15-16 at which Putin is expected to bring up the issue. Putin added a further twist saying Russia reserved the right to exit the deal for a 2nd time, but if it did, shipments from Ukraine to Turkey would not be impeded. Which left the unanswered question: Does this imply that shipments to destinations other than Turkey would be impeded? Russian wheat export prices are near $315 vs US $377.
Demand for US export corn remains low.US farmer is not selling. FC Stone raised their US corn yield from 173.9 to 174.5. USDA is 171.9. Brazil truckers continue to block roads to protest President election results. China announced a long list of Brazil companies that can ship corn to China. This may not impact World trade until July, 2023 Brazil harvest. Still it could lower Mexico imports from IS if Mexico install strict GMO import restriction. Key is if this is for food only but also feed.
Soybeans found support from talk of Higher export demand, high US crush margins and higher soyoil futures. SF soybean board crush margins are 270 with cash even higher. Soyoil and soymeal futures inverse and soybean carries has July futures margins closer to 167. Argentina is dry. Brazil is dry. Brazil soybeans entering vegetation stage while Argentina is still planning soybeans. 2 week Brazil and Argentina forecast is calling for rain. SF made new 6 week high and BOZ made 5 month high. Dalian vegoil prices are higher with palmoil up 10 pct this week and 27 pct since Oct 1. US renewable fuel capacity has double from last year and similar increase in under construction. China October service PMI dropped to a 5 month low to near 48.4. USDA is 49.8. Brazil truckers continue to block roads to protest President election results.
A lot of talk about low US diesel fuel supply. Warm US November could add to supplies. US Dollar is sharply higher. US stocks, Crude, gold, silver, copper, coffee, cocoa and cotton are all lower.
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