Written Commentary
CORN
While spot July-24 was up $.03 3/4, deferred contracts were steady to a $.01 better. Today’s high in Dec-24 corn was the midpoint of Friday’s range. The market was not impressed with the 100k mt old crop sale to Columbia. Tomorrow’s EIA report is expected to show last week’s ethanol production between 1,030 – 1,058 tbd, vs. 1,043 the previous week. Production was likely held in check due to logistical problems in the NW corn belt due to flooding. AgroConsult raised their forecast for Brazil’s 2nd corn crop nearly 4 mmt to 100.5 mmt, no update on their total crop production estimate. Despite the higher production they cut their 23/24 export forecast to 42.1 mmt, well below the 54.7 mmt in 22/23, citing increased competition from Argentina and weaker Chinese demand. Sept-24 corn just above $4.00 historically seems like fair value given June 1st stocks/Q1 thru Q3 usage at 42.6%. Years where the ratio is above 40% historically seems to be a much better fit.
SOYBEANS
The soybean complex was mostly higher with beans up $.02-$.05 led by spot July-24, oil was up $.01 while meal was mixed, up $1-$3 in nearby contracts, down $2-$4 in deferred contracts. Aug-24 soybeans stalled out just below last week’s high at $11.62 ½. After closing above both its 50 and 100 day MA yesterday, Aug-24 oil closed just above its May high of $.47. Aug-24 meal barely held support above its 100 day MA at $349.40. Bean oil was supported today by a potential trade war between China and Indonesia. Indonesia has threatened to place import duties of 100-200% on Chinese consumer goods. This will almost certainly be met with similar duties by China on Indonesia Palm oil imports. Less vegetable oil consumption in China would lead to less used cooking oil exports to the US creating better opportunities for BO in biofuel production. Spot board crush margins (July-24) surged another $.14 to $1.63 bu. carving out a fresh 7 month high. 24 hour precip. maps show heavy rains in EC NE into SW IA, also along the IA/MN border into central WI. Rainfall totals thru the end of the week are expected to continue to favor the central and northern Midwest. The US Ag. attaché for Brazil lowered their production forecast to 150 mmt, 3 mmt below the official USDA forecast while still just above Conab’s forecast just over 147 mmt. Sept-24 soybean just over $11 bu. historically seems a bit low with June 1st stocks / Q1 thru Q3 usage at 27.9%. Not near as tight a fit as corn however.
WHEAT
Prices were lower across all 3 classes today with Chicago and KC down $.07-$.10 while MGEX was off only $.01-$.02. Inside trading day for both Sept-24 KC and CGO. No significant change for the global weather picture. Hot/dry into mid-July for the Black Sea region. Winter wheat conditions slipped 1% to 51% G/E in line with expectations. Overall ratings are still the highest since 2019. Ratings declined in 6 states, improved in 5, while holding steady in 7. Harvest advanced to 54% at the high end of expectations and well above the 33% from YA and 5-year Ave. of 39%. Spring ratings improved 1% last week to 72% G/E, in line with expectations. These ratings are also the highest since 2019. 38% of the crop is headed just above the 5-year Ave. of 37% and below YA of 45%. Jordan reportedly passed on all offers from their recent tender for 120k mt of wheat citing too high of price.
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