Written Commentary
CORN
Prices jumped $.07 – $.09 today drawing support from the sharply higher wheat prices. Both July-24 and Dec-24 held support above Friday’s low before rallying. Resistance for July is at LW’s high at $4.75 ½, with secondary resistance at $5.02 ½ a 38% Fibonacci retracement. Dec resistance at $4.96 ¾ followed by $5.05 ½. US weather is expected to remain active this week with heaviest rainfall totals in Nebraska and the NC Midwest. Some rains are expected to reach north into southern MGDS and Parana provide some relief for late developing corn in Brazil. Export inspections at 48 mil. bu. were above expectations. YTD inspections at 1.386 bil. bu. are up 29% from YA, in line with the USDA forecast. There were 11 mil. bu. destined for China. Last week money managers were net buyers of just over 31k contracts of corn reducing their net short position to 71k contracts, their smallest short position since Aug-23. The average est. for US corn plantings is 67% vs. the 5-year Ave. of 71% and YA pace of 76%. My estimate at 63% looks to have established the low end of the range. Chinese customs data showed they imported 1.18 mmt of corn in April, up 17.6% from April-23. YTD imports have reached 9.1 mmt, up 6.5% from YA.
SOYBEANS
Prices were higher across the board with bean oil leading the way up 90 – 105. Beans were $.14 – $.20 higher while meal was up $3-$5. Bean spreads continue to firm on strengthening basis in Brazil with July beans closing $.05 inverse over Aug-24. Resistance for July beans is at the May high of $12.56 ½. July-24 meal continues to build support above $365 with resistance at the May high of $390. July-24 oil has surged to its highest level in over a month for now stalling out very near its 50 day MA at 46.51. Heavy rains and potential flooding are expected to return to RGDS in southern Brazil late this week once again raising the potential for production losses. Export inspections at 7 mil. bu. were a MY low and below expectations. YTD inspections at 1.461 bil. are down 18% from YA, vs. the USDA forecast of down 15%. Last week MM’s were net buyers of just over 11k meal, nearly 4k oil, while selling just over 1k contracts of soybeans. The MM long position in meal has swelled to 99k contracts, the largest since Dec-23.
WHEAT
Prices surged $.28 – $.38 across all 3 classes today led by KC and Chicago futures. Resistance for July-24 KC is LW’s high at $7.10, which also represents a 50% retracement of last summer’s high to the March low. Resistance for July-24 Chicago is LW high of $6.97. Following recent frost damage in areas of southern Russia, eastern Ukraine and western Kazakhstan, forecasts suggests they will remain in a dryer than normal pattern thru month end. In addition Ukraine’s recent drone attacks on Russian grain infrastructure at the port of Novorossiysk argue for additional “War Premium”. Export inspections at 8 mil. bu. were below expectations and brought YTD inspections to 657 mil. bu. down 7% from YA, vs. the USDA forecast of down 5%. IKAR analysts report Russian wheat export prices ended last week at $239/mt FOB, up sharply from $221/mt the previous week. They also est recent freezes have damaged 900k hectares of grain. APK-Inform estimates recent frosts may lead to yield losses of 20-30% for wheat and other spring crops in Ukraine. Chinese customs data showed they imported 1.95 mmt of wheat in April up 15.7% YOY, bringing YTD imports to 6.24 mmt, up 3.4% vs. 2023. Last week MM’s were net buyers of just over 14k Chicago wheat, nearly 7k in KC and nearly 6k in MGEX. While MM’s remain short in both KC and Chicago, they have flipped to being slightly long in MGEX. Spring wheat plantings are expected to have reached 76% with winter wheat ratings improving 1% to 51% G/E.
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