Written Commentary
CORN
Disappointing trade with prices down $.04 ½-$.05 ½ today, unable to hold overnight strength. July-24 made a new low for the week settling just above its 100 day MA support at $4.56 ½. Next support for Dec-24 is LW low at $4.77. Scattered but frequent showers this week has limited planting operations across the nation’s midsection. Best progress has likely been made in the northern Midwest and far WCB. Export sales at 34 mil. bu. (29 mil. – 23/24 MY, 5 – 24/25) were in line with expectations. Old crop commitments at 1.904 bil. are up 27% from YA vs. the revised USDA forecast of up 29%. Current commitments represent 89% of the USDA forecast below the historical average of 91%. Noted buyers last week were Mexico, Japan and Columbia all buying between 7 – 10 mil. US corn area in drought fell another 2% to only 12%, the lowest in the past year and well below the peak last June at 70%. The BAGE reported Argentine crop conditions fell another 3% to 14% G/E, however held their production forecast unchanged at 46.5 mmt, vs. the revised USDA est. of 53 mmt. They also report harvest advanced only 2% to 25.4% as growers continue to focus on soybean harvest. The difference between the USDA Brazil/Argentine production forecasts (175 mmt combined) and Conab/BAGE est. have narrowed up to just under 17 mmt, still historically wide however. Where final production winds up will have huge impact on US demand and price discovery.
SOYBEANS
Prices were mixed with meal down $4 – $5 while oil was up 85 – 95. Beans are mixed as spreads firmed despite yesterday’s weak crush data, July-24 was $.03 higher with new crop futures down $.02. July-24 continues to consolidate around its 100 day MA at $12.11. Resistance is at $12.56 ½ with support at the 50 day MA at $11.88 ½. July-24 meal continues to build support above $365. July-24 oil likely carving out a broad trading range between 42.50 and 46. Scattered showers have moved across the northern and central Midwest today however the heaviest activity thru the upcoming weekend will be along the Gulf coast and SE corn belt. Heavy rains are expected to return across the Midwest early into the middle part of next week keeping plantings at a slower than normal pace. Export sales at 11 mil. bu. were at the low end of expectations. Old crop commitments at 1.565 bil. are down 16% from YA vs. the USDA forecast of down 15%. Current commitments represent 92% of the USDA forecast, below the historical average of 97%. Soybean meal sales at 331k tons (300k – 23/24 MY, 31k – 24/25) were in line with expectations. YTD commitments are up 14% from YA, vs. the USDA forecast of up 8%. Soybean oil sales at 9k tons were at the high end of expectations. YTD commitments are up 11% from YA, vs. the USDA forecast of down 7%. US soybean area in drought fell another 2% to only 9%, vs. 19% YA and well below the peak last June at 63%. BAGE reported Argentine crop conditions fell 3% to 24% G/E, while lowering their production forecast .5 mmt to 50.5 mmt, vs. the USDA est. of 50 mmt. They reported harvest advanced 16% to 64% complete. The difference between the USDA Brazil/Argentine production forecasts (204 mmt combined) vs. Conab/BAGE est. have narrowed up to just under 7 mmt.
WHEAT
Prices were lower across all 3 classes today with KC and Chicago down $.02 – $.03 while MGEX was down $.05 – $.06. July-24 Chicago has made a new weekly low at $6.56 ¾ however settled well off session lows. Support for July-24 KC is at $6.65 ¾ with resistance at $7.10. Final results from the Kansas winter wheat crop tour showed a production forecast of 290.4 mil. bu. well above the 201 mil. from YA. The average yield at 46.5 bpa was well above the tours 5 year average of 42.4 bpa. Last Fri. the USDA forecast the USDA forecast Kansas production at 268 mil. bu. with an average yield of 38 bpa, above the 35 bpa from YA, however below the actual 5-year Ave. of 44.2 bpa. All wheat areas saw drought conditions decline LW. Winter wheat fell 3% to 25%, spring was down 1% to 14%, while durum was down a sizeable 16% to only 5%. After today’s close the Argentine Ag. Ministry forecast 2024 wheat acres at 6.15 mil. HA, well above the USDA est. of 5.5 mil. HA.
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