Written Commentary
Ag Market View for July 26.24
July 26, 2024
MORNING OUTLOOK
Grains are higher. SK is 6 cents and near 15.46. SN is near 15.20. SX is near 13.48. SMK is near 422.46 BOK is near 63.48. BOZ is near 51.05. CK is up 15 cents and near 6.72. CN is near 6.47. CZ is near 5.61. WK is up 16 cents and near 7.26. KWK is up 14 cents and near 6.88. MWK is up 11 cents and near 7.30.
US stocks are mixed to lower. US Dollar is lower. Crude is lower. Copper is higher.
Chinese Ag futures (September) settled down 3 yuan in soybeans, down 16 in Corn, up 11 in Soymeal, down 130 in Soyoil, and down 228 in Palm Oil. Malaysian palm oil prices were down 89 ringgit at 3,901 (basis July) at midsession on ideas of lower India import demand due to further rises in COVID.
Higher US domestic corn and soybean basis levels, talk of light May deliveries, dry Brazil and US north plains and Canada prairie weather could support grain futures. US Midwest 6-10 day forecast calls for above normal temps and normal rains.
Last week, corn futures rallied 70 cents and largest weekly gain since July, 2012. Higher cash basis supports SK and SN. Some feel CZ is too low. CZ could test 6.00 on less than perfect US spring and summer weather. Some feel dry weather this summer in west Midwest could eventually push CZ over 7.00. US corn plantings should be near 18 pct and near average.
Soybeans also tested 8 ½ highs. SK tested 15.50. Higher US cash basis and positive US crush margins continues to tighten US 2020/21 balance sheet. There is talk that US will need to import Brazil soybean and soyoil to finish this market year. Soymeal basis levels are lower on futures rally. Some concern about seasonal increase in palmoil production could offer resistance. Increase virus cases in India is raising concern about their vegoil import demand. US soybean plantings should be near 5-8 pct. Weekly exports should remain slow.
Wheat futures have been a follower to corn and near 8 year highs. Higher CN to near 6.75-7.00 could suggest any KC futures may be cheap below 7.00. Concern about dry US north plains and Canada prairie 2021 weather offers support to MLS spring wheat. Wheat like corn and soybean will need perfect 2021 World weather to keep futures from trading higher. Weekly US wheat exports should be slow. HRW crop ratings could drop slightly. US spring wheat planting could be near 35-40 pct done.
On Friday, Managed funds were net buyers of 1,000 contracts of SRW Wheat and even soymeal, and; soyoil and sold 1,000 soybeans, and 8.000 corn. We estimate Managed Money net long 30,000 contracts of SRW Wheat; net long 476,000 Corn; net long 207,000 Soybeans; long 54,000t Soymeal, and; net long 109,000 Soyoil.
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