Written Commentary
Ag Market View for July 26.24
July 26, 2024
MORNING OUTLOOK
Crazy markets!! Grains are higher. SU is up 35 cents and near 13.48. SX is up 35 cents and near 13.40 SMU is near 367.7. BOU is near 60.32. CU is up 2 cents and near 5.54. CZ is up 3 cents and near 5.43. WU is up 4 cents and near 6.30. KWU is up 7 cents and near 5.90. MWU is up 12 cents and near 8.06.
US stocks are higher. Crude is higher. Gold is higher.
Yesterday’s grain and oilseed selloff was extreme and severe. Most blame holiday US Midwest and north plains better than expected rains. For the Dakotas though one rain does not make a crop. Latest maps have reduced the amounts and coverage for the next north plains and upper Midwest rain event. Along with this change there is talk that China was asking for new crop US soybean prices overnight.
Technically Tuesday trade may have been overdone but there is no sign yet of a return to a bull market, US farmers in east and south could be willing sellers on rallies. Their corn crop is almost made with high yield potential. West US farmers are frustrated with light rains amounts and drop in prices.
NASS rated US corn crop 64 pct G/E vs 64 last week and 71 ly. IL, MN, ND, and SD ratings dropped. ND only 35. SD only 24 good. IA, MI, NE, OH, WI ratings increased. 10 pct of the crop is pollinating vs 14 ave.
Tight old crop supply suggest US 2021 yield cannot drop below 175. Brazil safrinha harvest is 12 pct. Crop est near 85 mmt. 2 mmt in export line up with only 190 mt loaded. Brazil domestic corn prices $45 above fob prices. High prices has China farmers add 6 pct planted acres or potential increase of 15 mmt.
NASS rated US soybean crop 59 pct G/E vs 60 last week and 71 ly. IA, MI, MS, OH and WI increased. IL, IN, LA, MN, MO, ND, SD, TN ratings dropped. Some fear dry LH July and August could drop ratings and yield potential. Tight old crop supply suggest US 2021 yield cannot drop below 49.5. 3 pct of the crop is setting pods vs 3 average. July Brazil soybean line up is only 5.8 mmt. 2.4 has been loaded.
NASS dropped US HRS ratings to only 16 pct G/E. 69 pct of crop was heading. US winter wheat harvest is 47 pct done vs 51 ly. KS 62, OK 90, MO 66, OH 30 and OR 2. WA crop is rated 20 pct G/E, OR 12. There is a big increase in World wheat trade with Iran, Egypt, Jordan, Algeria, Turkey. Ethiopia and Bangladesh tendering for World wheat. Black Sea wheat is still the lowest price followed by east Europe.
On Tuesday, Managed funds were net sellers of 14,000 contracts of SRW Wheat; 24,000 soybeans, 12,000 soyoil, 13,000 soymeal and 35,000 Corn. We estimate Managed Money net long 18,000 contracts of SRW Wheat; long 233,000 Corn; net long 72,000 Soybeans; net long 29,000 lots of Soymeal, and; long 36,000 Soyoil.
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