Written Commentary
SOYBEANS
The soybean complex was mixed with soybeans down $.15 – $.35, meal was down $15 – $20, while oil was up 110 – 215. July-23 held above yesterday’s low before recovering. The July/Nov spread surged $.30 intraday to $1.92 before backing up into the close. Last year’s spread peaked at $2.00 prior to July deliveries before exploding to $3. Strong old crop exports at 17 mil. bu. supported the bull spreading. YTD commitments for old crop at 1.915 bil. bu. are down 13% from YA, vs. the USDA forecast of down 7%. Soybean oil is supported by the EU cracking down on Chinese waste cooking oil imports for biofuel production. An audit has been unable to trace where the Chinese waste oil was originated. Both the EU and US have steeper taxes imposed on vegoil sourced from tropical origin such as Indonesia or Malaysia. A US audit will likely arrive at the same result. Recall soybean oil used as feedstock for biofuel production slipped to its lowest level ever in Mch-23 at 39%, down from its long-term average of 46% and recent peak of 53%. Spot soybean oil has recovered over 50% of this week’s price plunge stimulated from the disappointing EPA mandates. Spot board crush margins plunged this week down $.60 to a multi-year low of $.46 ½ bu. With all the intraweek volatility in the soy products, bean oil PV closed the week at 41.4%, down fractionally for the week.
CORN
Prices were down roughly $.30 across the board. Both old and new crop prices closed lower for the week. Rainfall over the next 7 days is expected to favor the northern half of the Midwest with much lighter totals in MO, Central IL and IN. Longer range 6-10 and 8-14 day forecasts are shifting into a normal to above normal precipitation pattern. A rapid change in the overall weather pattern is desperately needed soon given that much of the nation’s midsection has received less than 50% of its normal rainfall in the last 60 days. Coverage of weekend rain and longer range forecasts will drive Sunday nights trade. Next support for July is its 100 day MA at $6.20. Dec-23 bottomed out very near $5.85, the midpoint between last summer’s contract high and the May low. Export sales were weak with only 1 mil. bu. of old crop and 2 mil bu. of new. Old crop commitments at 1.522 bil. bu. are down 36% from YA, vs. the USDA forecast of down 33%. US corn prices continue to run $30 – $40 mt over Brazilian supplies thru the end of summer. Not only are old crop exports disappointing, new crop commitments at only 119 mil. bu. are less than half of YA totals for mid-June, and the lowest in 7 years. Placements at 105% were above expectations of 102%, while marketing’s were also in line at 102%. The BAGE lowered their Argentine production est. another 2 mmt to 34 mmt, just below the USDA forecast of 35 mmt. Harvest advanced 6% to 44% complete.
WHEAT
Wheat prices were lower across the board with Chicago down $.06 – $.10, while KC and MGEX both $.08 – $.15 lower. Export sales at only 4 mil. bu. were below expectations. YTD commitments at 149 mil. are the lowest in over 20 years and down 23% from YA, vs. the USDA forecast of down 6.5%. The BAGE lowered their planted acreage forecast by 3% to 6.1 mil. HA. Planting progress advanced 18% LW to 58% complete. Stats Canada is out with a 2023 acreage update next Wed. We’ll report average est. early next week.
See more market commentary here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
