Written Commentary
CORN
Prices were down $.04-$.05 today as spreads bounced off their recent lows. Support for Dec-24 is at its contract low at $3.90. Exports at 56 mil. bu. (5 mil. – 23/24 MY, 51 – 24/25) were above expectations. Old crop commitments at 2.202 bil. are up 38% from YA vs. the USDA forecast of up 35%. Current commitments represent 98% of the USDA forecast, just below the historical average of 99%. Shipments are up 36%. New crop commitments at 312 mil. bu. are now up 8% from YA while representing 14% of the USDA forecast, behind the historical average of 19%. Mexico bought nearly 35 mil. bu. of new crop while Guatemala bought just over 5 mil. In addition the USDA announced the sale of 111k mt (4.4 mil. bu.) to Mexico and 132k mt (5.2 mil. bu.) to an unknown buyer. Results from Day 4 of the PF crop tour are expected this evening. The President of the National Grain & Feed Association warns that the labor stoppage at Canada’s 2 largest rail operators may inflict severe shock to North America’s agricultural supply chain. Not only will US exports to Canada be impacted but also some Ag. products destined for the PNW that travel routes thru Canadian rail lines. Historically August hasn’t been a particularly good month for Dec corn closing lower 8 of the past 10 years. So far down only 1.5% from the July close.
SOYBEANS
The soybean complex was lower across the board with beans down $.18-$.22, meal was down $4-$6, while oil was 55-65 lower. Next support for Nov-24 beans is its contract low at $9.55. Support for Sept-24 meal is at $300 ton. Outside day for Sept-24 oil as it rejected trade above $.41 lb. Next support is this week’s low at 39.48. Spot board crush margins improved $.02 to $1.75 ½ bu. While rainfall in the WCB in the past 24 hours has been scattered, some areas did pick up 1-2” amounts. Only very lite and scattered rains are expected across the nation’s midsection over the next week. The extreme heat in the deep south will gradually spread north bringing widespread 90+ degree temperatures across the Midwest this weekend before quickly cooling again by the middle of next week. A widespread rain event by early Sept. is needed to optimize soybean yields. Exports at 60 mil. bu. (-2 mil.–23/24 MY, 62 mil.–24/25) were at the high end of expectations. Old crop commitments at 1.686 bil. are down 14% from YA in line with the USDA forecast. New crop commitments at 277 mil. are still the lowest since 2019 and down 36% from YA vs. the USDA forecast of up 9%. China/unknown combined to buy just over 50 mil. bu. of new crop last week. In addition the USDA announced the sale of 198k mt (7 mil. bu.) of soybeans sold to China. Total announced soybean sales this week have reached 47 mil. bu. Soybean meal sales saw net cancellations of 20k tons on old crop with new crop sales at only 136k tons. Old crop sales are up 9% from YA, in line with the USDA forecast. The USDA also announced the sale of 105k mt of meal to Vietnam. Soybean oil sales at 10k tons were in line with expectations. Old crop commitments are up 78% from YA vs. the USDA forecast of up 72%. The PF crop tour found near record pod counts in IL at 1,419 per 3 x 3” squares. August hasn’t been a particularly kind month to November soybean either also closing lower 8 of the past 10 years. So far Nov-24 beans are down 6% from the July close.
WHEAT
Prices were lower across all 3 classes today with MGEX the downside leader closing $.11-$.13 lower. Chicago and KC managed to bounce off session lows finishing $.07-$.09 lower. New contract lows across all 3 classes for the Sept-24 contract. While spot Chicago traded to a 4 year low, prices were able to hold above $5.00 bu. Lowest close since Dec-2020 for spot MGEX. Traders seem to be fearing an influx of Canadian wheat into the US as Canada’s 2 largest railways did formally shutdown overnight after negotiations weren’t able to produce a compromise. Exports at 18 mil. bu. were at the high end of expectations. YTD commitments at 346 mil. are up 31% from YA, vs. the USDA forecast of up 17%. Commitments represent 42% of the USDA forecast, slightly below the historical average of 43%. A German farm group estimates their 2024 harvest will only reach 18 mmt, down roughly 15% from YA due to heavy rains this spring and early summer. US winter wheat areas in drought increased 2% last week to 45%, the highest in 10 months.
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