Written Commentary
Ag Market View for July 26.24
July 26, 2024
MORNING OUTLOOK
New month. Grains are mixed. SX is down 8 cents and near 12.41. SMZ is near 329.7. BOZ is near 61.28. CZ is unch and near 5.68. WZ is up 3 cents and near 7.76. KWZ is up 1 cent and near 7.86. MWZ is up 3 cents and near 10.56. OZ is near 7.30.
US stocks are higher. US Dollar is mixed. Crude is higher and near $84. Copper is lower.
GSI Commodity Index is higher led by higher energy prices. EU Central Banks talking raising rates to slow inflation. Supply chain disruptions could slow global economies. Oats, canola, cotton, Crude, wheat, silver, S/P 500, wheat, corn and coffee were among best performers in October. Ethanol, hogs, Nat Gas, soybean and soymeal were among the worse.
Corn futures have rallied on talk of higher corn ethanol demand and margins. Estimates of higher demand for US exports is supportive. Some feel resistance may be building near 5.70-5.75 if USDA raises US corn yield on Nov 9 and fail to increase demand as much as market is trading. Prices could also be under pressure once South America harvest begins. Corn futures could find support near 5.30-5.40 if USDA does not raise US yield on 2022 US/Argentina weather is less than ideal.
Soybean futures managed to test key resistance last week on near record US soybean crush margins and strong US domestic and export soymeal basis. C IL soymeal basis is near +10/13 and +30 above average. Still, lack of big new China buying US soybean and favorable South America weather could top SF near 12.50. China PMI data dropped to 49. This could suggest slowdown due to electrical blackouts, Increase Covid restrictions and supply chain disruptions. USDA Nov 9 report could be negative soybean prices.
Minneapolis and Matif wheat futures made new highs on record low World exporters stocks to use. Talk USDA could lower Canada supplies on Nov 9 is also supportive. Dry weather in US and Russia winter wheat areas is also supportive. Some feel WZ could be in a 7.40-8.00 range with new demand for US export wheat needed to push futures over 8.00. Increase South Hemisphere wheat harvest could also offer resistance to wheat prices.
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