Written Commentary
CORN
Prices were down $.04-$.05 ½ today with the Sept-24/Dec-24 spread widening to a new low at $.18 bu. Both contracts however held above their recent low. SovEcon lowered their Ukraine corn production forecast 2 mmt to 25.6 mmt citing hot/dry conditions in July. The USDA est. in July was 27.7 mmt. The USDA FAS office in Europe is forecasting to EU corn production at only 59.8 mmt, vs. the official USDA forecast from July at 64 mmt. US ethanol production slipped to 1,067 tbd last week, down from 1,109 tbd the previous week however still up 4% from YA. Production was below expectations however just above the pace needed to reach the USDA corn usage forecast of 5.450 bil. bu. There was 107 mil. bu. of corn used, or 15.3 mil. bu. per day, above the 15.15 mbd needed to reach the USDA. Implied US gasoline demand fell 3% LW to 8.967 mbd, and was down 3.6% YOY. Export sales tomorrow expected to range between 25-55 mil. bu.
SOYBEANS
The soybean complex was mixed with beans down $.08-$.09, meal was $4-$5 lower, while oil has surged 90 – 140. Sept-24 soybeans established a new contract low overnight however held just above the $10 threshold. Sept-24 meal rejected trade above $340 yesterday while also failing to seriously challenge the 100 day MA resistance at $345. Next support is at $320. Sept-24 oil rejected trade below $.40 yesterday and closed above $.42 lb today. Next resistance is at LW’s high of 43.57. Spot board crush margins improved $.08 today to $1.94 bu. with BO PV surging over 1% to 38.3%. Chinese customs reports soybean imports of 9.85 mmt in July, while up 3% YOY its well below the 12-13 mmt estimated by global shipping sources. Since last Oct. Chinese customs showed imports of only 81 mmt for the first 10 months of the 23/24 MY. The USDA is forecasting total imports for the 23/24 MY at 108 mmt. In all likelihood Chinese customs continue to under report imports and is why the USDA no longer relies on their figures for global trade forecasts. Brazil’s Ag. Ministry pegs July exports at 11.25 mmt, up from 9.7 mmt YA. Abiove kept their 2023/24 Brazilian production forecast unchanged at 153.2 mmt, vs. the USDA at 153 mmt. Export sales tomorrow are expected to range from 18 – 42 mil. bu. for beans, 100-500k tons meal, and 5-20k tons of oil.
WHEAT
Prices were $.04-$.06 lower across all 3 classes today in 2 sided trade. Prices were likely higher overnight following the huge 3.8 mmt wheat tender from Egypt’s GASC. This is believed to be their largest tender ever with imports covering Oct-24 thru April-25. Egypt typically imports 5-6 mmt annually. The deadline for the offers is Aug. 12th. The USDA FAS in Europe is forecasting total EU wheat production at 127.5 mmt vs. the USDA official est. in July at 130 mmt. SovEcon also lowered Ukraine’s wheat production .7 mmt to 19.7 mmt, in line with the USDA est. in July at 19.5 mmt. Algeria is reportedly tendering for 50k mt of soft milling wheat in a tender that closes tomorrow. Export sales tomorrow are expected to range from 10 – 20 mil. bu.
Charts provided by QST Charts.
>>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.
