Written Commentary
CORN
Strong demand numbers without real aggressive cuts yet to SA production made today’s USDA data supportive. Old crop 23/24 ending stocks were down 100 mil. to 2.022 bil. at the very low end of expectations and 80 mil. below the average trade guess. No surprises on 2024 US production at 14.860 bil. and yield at record 181 bpa. New crop stocks projected at 2.10 bil. while if realized would be the highest in 6 years, were almost 200 mil. below the average guess. Usage at 14.805 bil. was 100 mil. above Feb-24 Outlook Conf. Both crop years saw exports and usage for ethanol production up 50 mil. vs. April WASDE or Feb. Outlook. Production cuts to SA were modest with Argentina and Brazil both down 2 mmt. The USDA forecast in Argentina at 53 mmt, still well above most others at 47 mmt. Argentine exports were slashed 4 mmt. Brazil’s forecast at 122 mmt, still well above Conab at 111 mmt. Ukraine’s 23/24 production and exports were both raised 1.5 mmt. 2023/24 global stocks at 313 mmt, down 5 mmt from April. 2024/25 stocks projected at 312 mmt, well below expectations of 318 mmt. Chinese imports for 23/24 were left unchanged at 23 mmt, with the same figure being used for 24/25 MY. Prices were $.10 – $.13 higher finishing near session highs. Upside objective for July-24 at 50% Fibonacci retracement of $5.03.
SOYBEANS
No change to old crop ending stocks, holding steady at 340 mil. bu., in line with expectations. No surprises with 2024 US production at 4.450 bil. and record yield at 52 bpa. New crop stocks expected to grow to 445 mil. 15 mil. above the average guess. Usage at 4.360 bil. was down 40 mil. from the Feb-24 Outlook Conf. Exports were down 50 mil. seed/residual down 15 mil. while crush was up 25. Argentine production was unchanged at 50 mmt while Brazil was lowered only 1 mmt to 154 mmt. Chinese imports were held steady at 105 mmt, and projected to rise to 109 mmt in 24/25. 2023/24 global stocks fell 2.4 mmt to 111.8, slightly below expectations. New crop stocks expected to surge to 128.5 mmt, well above initial forecasts of 121 mmt. The much higher stocks for 24/25 are driven by expectations for record production in Brazil. Spot board crush margins jumped another $.06 today to $1.02 bu. a 4 month high. Bean oil PV jumped 1% to 37.4%. The recent sell off has enabled bean oil to be more competitive in the global vegetable oil market and as a feedstock for renewable diesel production. Freezing temperatures in Argentina and Russia along with a return of rains in RGDS in Southern Brazil are helping stimulate additional weather premium. The central US is beginning to dry down from recent heavy precipitation. Some rains are expected to develop in the SW plains this weekend. Heavy rains are expected across the Gulf coast and Delta region by early next week with moderate shower activity stretching into the southern Midwest.
WHEAT
Prices were $.16 – $.26 higher led by strength in Chicago SRW. Chicago July-24 stopped just shy of the Dec-23 high at $6.66. July-24 KC failed to trade above this week’s high of $6.79. 2023/24 ending stocks fell 10 mil. bu. to 688 mil. due to higher exports. New crop ending stocks expected to rise to 766 mil. however was down 20 mil. from expectations. All wheat production at 1.858 bil. was 30 mil. below expectations. Winter wheat production at 1.278 bil. was 30 mil. below expectations, yet within the range of estimates. Nearly 74% of the planted acres are forecast to be harvested for grain, well above the historically low 67.3% YA. The Ave. yield at 50.7 bpa is barely above YA 50.6. HRW wheat production at 705 mil. was 10 mil. above expectations, SRW at 344 mil. were 60 mil. below forecasts, while white wheat production at 229 mil. was roughly 15 mil. above the ave. guess. 2023/24 global stocks were steady at 258 mmt, slightly above expectations. The USDA made no change to the Russian production est. at 91.5 mmt however raised their exports 1.5 mmt. Ukraine production was cut .4 mmt to 23 mmt. 2024/25 global stocks expected to slip to 253.6 mmt, nearly 4 mmt below expectations.
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