Written Commentary
CORN
Prices were $.10-$.11 lower as Sept-24 made new contract lows at the close. Dec-24 managed to hold above Friday’s low. Disappointing price action following the supportive USDA WASDE data on Friday showing US ending stocks well below expectations. Clearly the market is trading US yields above the USDA forecast of 181 bpa while the higher usage figures will have to prove themselves over time. MM’s were net sellers of over 17k contracts last week extending their short position to a record large at 353k contracts. Export inspections at 43 mil. bu. were in line with expectations and in line with the weekly amount needed to reach the revised USDA forecast of 2.225 bil. YTD inspections at 1.756 bil. are up 31% from YA, vs. the USDA forecast up 34%. AgRural estimates Brazil’s 2nd crop harvest has reached 74% in the center south region. While global stocks among exporting countries continues to rebound from 20/21 lows, they do remain well below the excesses from the middle part of last decade.
SOYBEANS
New contract lows for both Aug and Sept. bean contracts while Nov-24 traded to a new 3 ½ year low. Next support for Aug-24 beans is $10.50. New 3 month low for Aug-24 meal with next support near the April low of $330. Spot bean oil prices rebounded as the lower than expected NOPA crush figure resulted in oil stocks slipping to 1.622 bil. lbs., below expectations of 1.669 bil. lbs. NOPA crush at 175.6 mil. bu. was below the average trade guess of 178 mil. however within the range of estimates. The soybean complex may also be feeling some political pressure as many speculate that following the assassination attempt of former Pres. Trump, his odds of regaining the Presidency have improved stoking concern of additional tariffs and trade wars with China. China’s GDP grew only 4.7% in Q2, below expectations for a 5% increase. MM’s were net sellers of nearly 32k contracts of beans last week extending their short position to a record large 172,605 contracts. MM’s were net buyers of nearly 45k bean oil while selling nearly 13k meal. Export inspections at only 6 mil. bu. were a MY low and below the pace needed to reach the USDA export forecast. YTD inspections are down 16% from YA, vs. the USDA forecast of down 15%. On Friday Safras & Mercdo forecast Brazil’s 2024/25 soybean acres will grow 1.9% to 47.33 mil. HA (117 mil. acres). Production is expected to reach a record 171.5 mmt. Global stocks/use among the 4 largest exporters is expected to rise to just over 22%, the highest in 6 years.
WHEAT
Prices were $.12-$.20 lower across all 3 classes today with new contract lows all around. Next support for spot Chicago is $5.20, the March low on the weekly chart. KC Sept-24 held $5.50 however has fallen to its lowest price since Dec-2020. Lowest level for spot MGEX since Nov-2020. Last week MM’s were lite buyers in KC and Chicago and lite sellers in MGEX. Export inspections at 20 mil. bu. were above expectations and above the weekly amount needed to reach the revised USDA forecast of 825 mil. YTD inspections are up 26% from YA, vs. the USDA forecast up 15%. IKAR raised their Russian wheat production forecast 1.2 mmt to 83.2 mmt, in line with the USDA. They also report the export price for Russian wheat last week fell to $219/mt last week, down from $216/mt the previous week. SovEcon report Russia exported 600k mt of grain LW, of which 510k was wheat, down from 700k shipped the previous week. Tight stocks among global exporters of wheat seemingly ignored given the large jump in US production/stocks. While production in Russia is not as low as initially feared, it will present better opportunities for US wheat in the global marketplace.
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