Written Commentary
CORN
Prices were down $.04 – $.05 at today, again unable to hold higher trade overnight. July-24 has made a new low for the week while violating support at last week’s low. Next support is at the 50 day MA at $4.51 ¼. Dec-24 violated support at LW low at $4.77. The central and western corn belts will likely have a few good planting days before widespread rains return to the nation’s midsection early thru the middle part of next week. Late yesterday the BAGE reported Argentine harvest advanced only 2% to 25% complete while leaving their production forecast unchanged at 46.5 mmt, well below the USDA est. of 53 mmt. The gap between USDA and Conab/BAGE production forecasts narrowed 3.3 mmt this month, however remains historically wide at nearly 17 mmt. Emater, a crop agency in RGDS estimates corn harvest in the state advanced 2% last week, despite area flooding, to 88%. Since July-23 Ukraine’s grain exports have reached 44.2 mmt, surpassing the YA pace by less than 1%. Corn exports at 24.8 mmt are still down 4.6%. Comments from a BMO Global Farm to Market Conf in NY suggested corn acres may drop 3 mil. from Mch-24 intentions to only 87 mil. this year, with some of these acres being shifted to beans or cotton. In 2019 corn acres did fall 3.1 mil. from March to final, however planting delays that year were much more than now with over 33% of the corn planted in June-19. Best guess is corn plantings reach 75-80% by end of May. Look for plantings to reach into the upper 50’s perhaps 60% by end of this weekend.
SOYBEANS
Prices turned higher across the board with beans up $.04 – $.12 led by nearby July. July/Aug spread traded to a $.03 inverse. Meal was $1 – $2 higher in old crop, steady to lower in new crop. Oil once again held solid 70-75 point gains into the close. July-24 beans stopped just shy of this week’s high at $12.32 ¾. July-24 meal continues to build support above $365. July-24 oil reached a 3 week high before pulling back. Likely to remain in a 42.50 and 46 range unless higher UCO tariffs are announced. RGDS in Southern Brazil is expecting another round of heavy rains next week keeping fears of flooding and production losses elevated. Some scattered rains may drift into MGDS and Mato Grosso in WC Brazil providing some relief to their 2nd crop corn. The BAGE lowered 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 vs. Conab/BAGE est. have narrowed up to just under 7 mmt. Emater estimates soybean harvest in RGDS advanced 7% LW, despite area flooding, to 85%. They went on to suggest a portion of the remaining crop may be abandoned resulting in production losses of 1.8 – 3 mmt. Concern over lack of new crop sales is beginning to grow. So far there are no sales on the books for China with total commitments at only 33 mil. bu. at multiyear lows.
WHEAT
Prices finished near session lows down $.09 – $.12 across all 3 classes. All 3 spot July-24 contracts have made new weekly lows. Yesterday 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 Kansas production at 268 mil. bu. with an average yield of 38 bpa, above the 35 bpa from YA, however below the 5-year Ave. of 44.2 bpa. The tour production forecast and yield would suggest harvested acres at only 6.245 mil. or 81% of the planted acres and well below the USDA 7.05 mil. Russia lowered their export tax 2% to 3,110 roubles/mt. Ukraine’s wheat exports since July-23 at 16.6 mmt are up 10% YOY and fast approaching the USDA forecast of 17.5 mmt. Russia’s Grain Union estimates the country will be able to export nearly 48 mmt of wheat in the 24/25 MY, down from 53.5 mmt in 23/24 and below the USDA 24/25 est. of 52 mmt.
>>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.
