Written Commentary
CORN
Prices were $.01 – $.03 higher today recovering from lower trade overnight as spreads firmed. Both July-24 and Dec-24 traded to a fresh 4 month highs this AM. Next resistance for July-24 is $5.03, a 38% retracement from last June-23 high to Feb-24 low. Resistance for Dec-24 is at the 50% retracement at $5.05 ½. Export inspections at 37 mil. bu. were below expectations and below the weekly amount needed to reach the revised USDA forecast of 2.150 bil. YTD inspections at 1.336 bil. are up 30% from YA, vs. the USDA forecast of up 29%. Last week money managers bought just over 115k contracts of corn, reducing their short position to 102.5k contracts, the smallest since Oct-23. Offsetting the speculative buying was aggressive selling by farmers in both North and South America. Producer/merchant short positions surged just over 107k the largest 1 week change since May-2019. Index funds have also been active buyers of corn of late having added over 42k contracts over the past 2 weeks. IKAR lowered their Russian grain production forecast 7 mmt to 135 mmt, with exports falling 5 mmt to 59.5 mmt. Since last July Ukraine’s grain exports have reached 43.2 mmt, vs. 43.6 mmt YA. Corn exports have reached 24 mmt, vs. the revised USDA forecast of 26 mmt for the MY. Prospects for further SA production cuts likely to keep prices supported until more is known about the US growing season.
SOYBEANS
The soybean complex was mixed with beans steady to $.06 higher as spreads weakened, meal was $3 – $5 lower while oil was up 70 – 80. Resistance for July beans is at LW’s high at $12.56 ½ with Nov coming in at $12.30 ½. It was an inside trading day for July meal. Resistance for July oil is at 46.12. Spot board crush margins slipped $.05 ½ to $.88 bu. while oil PV rebounded to 38.1%. Weekend rains in the US were heaviest across the Gulf coast and Delta region. Rains this week will favor the SE half of the Midwest with heaviest totals again along the Gulf coast. Heavy rains and flooding returned in RGDS in Southern Brazil this weekend. This week is expected to see a dryer trend as showers shift a bit north providing some relief for their 2nd corn crop in Parana and MGDS. Week 2 of the outlook brings above normal showers back into RGDS. Export inspections at 15 mil. bu. were at the high end of expectations and just above the weekly total needed to reach the USDA forecast. YTD inspections at 1.453 bil. are down 18% from YA, vs. the USDA forecast of down 15%. Last week MM’s bought nearly 108k contracts of beans, 44k contracts of meal and just over 1k contracts of oil. At just over 153k contracts, the total MM buying last week in the soybean complex was a record high. Their net short position is down to 19K contracts, the smallest since the first week of the year. Offsetting the speculative buying was aggressive farmer selling. The producer/merchant short positions surged just over 84k the largest 1 week change since Aug-2020. Conab to released updated Brazilian production forecast tomorrow.
WHEAT
Prices surged led by KC up $.24 – $.27, Chicago was $.22 – $.24 higher, while MGEX was up $.18. July-24 Chicago jumped to its highest level since Aug-23. Next resistance is 62% Fib. Retracement level at $6.99. July-24 KC reached an 7 month high, peaking very near its 50% retracement at $7.09. Export inspections at 13.5 mil. bu. were in line with expectations however below the weekly amount needed to reach the revised USDA forecast of 720 mil. YTD inspections at 649 mil. are down 6% from YA, vs. the USDA forecast of down 5%. Last week MM’s bought between 5k – 6k contracts of Chicago, KC and MGEX cutting their combined short position to 69K contracts, the smallest since Aug-23. IKAR lowered their Russian wheat production forecast 5 mmt to 86 mmt, vs. the USDA at 91.5 mmt. They also lowered their export forecast 3.5 mmt to 47 mmt, while the USDA raised their forecast 1.5 mmt last week to 51.5 mmt. IKAR also reports Russia’s wheat export price ended last week at $221/mt, up from $216/mt LW. Since July-23 Ukraine’s wheat shipments have reached 16.4 mmt, compared to the USDA forecast of 17.5 mmt for the 23/24 MY.
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