Written Commentary
CORN
Prices were $.06-$.07 ½ lower today as spreads strengthen a touch. Support for July-24 comes in at the June low at $4.38 ¼. Support for Dec-24 is at $4.58 ¼. While heat builds across the central and eastern corn belt, waves of rain are expected for the NW third of the belt over the next week to 10 days. Isolated flooding is likely for some areas of MN and northern WI. Very little change from speculative traders last week as the CFTC COT report showed money managers were net buyers of 427 contracts, while index funds sold 1,822 contracts. Export inspections at 51 mil. bu. were in line with expectations. YTD inspections at 1.591 bil. are up 26% from YA, vs. the USDA forecast of up 29%. AgRural reports Brazil’s 2nd crop harvest has reached 21%, well ahead of the 5% pace from YA, the fastest in over a decade. The rapid pace to harvest may cut into the US global share of exports. Brazil’s Pres. Luna is expected to propose a revised tax plan in coming days that is expected to be watered down from his earlier plan. Farmers are reportedly selling grain fearing a higher tax burden down the road.
SOYBEANS
The soybean complex was mixed with beans $.18-$.22 lower, meal was down $8-$9 while oil is steady to up 5. July-24 beans plunged to its lowest level in 7 weeks, barely holding above support at the May low at $11.56 ¼. July-24 meal closed right at its 50 day MA support. July-24 oil continues to consolidate just below $.44 lb. Extended forecasts show the high pressure ridge that is blocking rain from reaching the east will shift south and west enabling precipitation to return to central IL eastward by the closing days of June. Both the NWS 6-10 and 8-14 day forecasts show normal to above normal precipitation for the entire Midwest. Markets are placing a high degree of confidence in these extended forecasts. NOPA crush members processed 183.6 mil. bu. in April, above the Ave. trade guess of 178.3 mil. however within the range of estimates. Crush was up 8.4% from April-24 and up 3.2% from May-23. Implied census crush for May-24 is roughly 192 mil. bu. If reached YTD crush in the first 9 months of the 23/24 MY would reach 1.743 bil. bu. up 3.6% vs. YA and in line with the revised USDA forecast of 2.290 bil. bu. Oil stocks at 1.724 bil. lbs were below expectations of 1.775 bil. and down 6% from April-24. NOPA data would suggest another monthly rebound in bean oil usage, likely driven by biofuel production as BO had become more competitive with UCO. Spot board crush margins improved another $.05 to $1.16 bu., a fresh 6 month high. Last week MM’s were net sellers across the soybean complex having sold just over 16k soybeans, 18k oil and nearly 8k meal. The MM short position in oil has swelled to nearly 76k, their largest short position in just over 5 years. Export inspections at 12 mil. bu. were in line with expectations. YTD inspections are down 17% from YA, vs. the USDA forecast of down 15%.
WHEAT
Prices were $.19 – $.22 lower across all 3 classes today. Chicago July-24 has plunged thru its 100 day MA support and the $6 level reaching an 8 week low. Same story for July-24 KC. July-24 MGEX traded to a new contract low, next support at $6.25, April’s low on the weekly chart. Central and eastern Ukraine received some rain this weekend providing temporary relief from recent dryness. Not much moisture slipped into dryer areas of Southern Russia. Last week MM’s were net sellers across all 3 classes of wheat having sold over 13k in Chicago, just over 5k in MGEX and nearly 3k in KC. Export inspections at 14 mil. bu. were at the high end of expectations, however just below the 15 mil. bu. needed per week to reach the revised USDA forecast. After 2 weeks, cumulative inspections at up 21% over YA, vs. the USDA forecast of up 11%.
Charts provided by QST.
>>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.
