Written Commentary
CORN
Prices were $.10-$.12 lower today however managed to close slightly higher for the week. Sept-24 can’t shake out of its $3.90-$4.10 range. Roughly $4.03-$4.23 for Dec-24. Speculators bought roughly 35k contracts of corn this week prior to today without much upside price movement to show for it. The BAGE reports Argentine corn harvest has reached 87%, up 8% for the week. Production was left unchanged at 46.5 mmt vs. the USDA at 52 mmt. Corn ratings in France increased 1% this week to 82% G/E. Ukraine’s 24/25 grain exports thru July 26th have reached 3.0 mmt, well above the 1.9 mmt YA. Corn exports represented 1.44 mmt of this total. With this week’s heat and dryness in the WCB I’d expect crop ratings to slip 1-2% on Monday. After the close of trade next Thur. the USDA will release census data on corn used for ethanol production for the month of June. Implied demand in Q4 will need to reach 3.121 bil. bu. up 15% from YA and the highest in 6 years to hit the USDA ending stocks forecast.
SOYBEANS
With the exception of spot meal the soybean complex was sharply lower today. Beans were down $.30-$.38 making fresh session lows on the close. Meal was steady to $1 higher in nearby futures with deferred down $4-$5 while oil was pounded, down over $.02 lb. Aug-24 beans established new contract lows in late trade. Spot futures closed at their lowest price level on the weekly chart since the fall of 2020. For now Nov-24 beans have held support above its contract low at $10.31 ¾. Aug-24 oil plunged to a new low for the month. Next support is the contract low at 42.80. Bean oil was pressured today be a US Court of Appeals decision to vacate most of the EPA’s 2022 denials of petitions for small refinery exemptions from Renewable Fuel Standard obligations. Aug-24 meal has jumped out to a fresh 2 week high drawing support from strong domestic and export demand. Next resistance is the July high just below $360. No change in the near-term forecast as building heat in the southern plains and WCB is expected to last into early August. Indications the high pressure ridge slides further west in week 2 of August has driven the extraction of weather premium today. With US drought readings historically low the market seems to be quickly shrugging off the late July, early August heat. Rainfall over the next 5-7 days to favor the NC Midwest and ECB as systems ride up and over the high pressure ridge. Scattered moisture for the central Midwest with little to no rain expected for southern plains and far WCB. Clearly the market is gaining confidence US yields will exceed the current USDA forecast of 52 bpa despite the heat/dryness being felt in the WCB. Spot board crush margins surged $.17 today $1.80 bu., the highest since opening days of July. Bean oil PV has plunged to just over 38% down from its recent peak at 41%. This week’s weakness in the Brazilian real, while holding above the early July low, didn’t help attach new crop demand for US beans.
WHEAT
Prices were $.14-$.16 lower across all 3 classes today. New contract lows were established late for both Sept-24 Chicago and KC. Chicago managed to hold above the Spring low on the weekly chart at $5.19 ½. Lowest price for spot KC since Dec-2020. Sept-24 MGEX fell back below the $6.00 level however still well above its contract low near $5.75. The ND spring wheat tour forecasts state yields at 54.5 bpa, the highest ever for the tour that started in the early 90’s. The USDA is forecast yields at 56 bpa, well above the previous record of 50 bpa in 2022. SovEcon raised their Russian wheat production forecast .5 mmt to 84.7 mmt, vs. the USDA forecast of 83 mmt. Taiwan Flour Millers Association is tendering for nearly 106k mt of US milling wheat for late Oct-24 shipment. Russia slashed their wheat export tax 41% to 906.40 roubles/mt for the period ending Aug. 6th.
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