Written Commentary
CORN
Prices were down $.02 – $.05 with spreads weakening. July-24 failed to trade above yesterday’s high of $4.75 ½ overnight triggering a pullback. It was an inside trading day for July. Dec-24 traded to fresh 4 month high before pulling back. Resistance for Dec-24 is at the 50% retracement at $5.05 ½. The USDA announced the sale of 405k mt (16 mil. bu.) of corn to Mexico. 5 mil. was for old crop 23/24 MY with 11 mil. for 24/25 MY. US planting progress reached 49%, in line with expectations however behind the YA pace of 60%, and the 5 year Ave. of 54%. 3 of the largest producing states, IL, IA and NE all remain roughly 1 week behind their normal pace. Conab raised their Brazilian production forecast .6 mmt to 111.64 mmt, still well below the updated USDA forecast of 122 mmt. In 2024/25 USDA data shows global production among the top 4 exporting countries is expected to slip 13 mmt to 582.5 mmt. Despite the lower production the stocks/use ratio is expected to hold at 10.2%. Tomorrow’s EIA report is expected to show ethanol production between 955-985 tbd, vs. 965 tbd the previous week.
SOYBEANS
Prices were mixed with beans down $.05 – $.07, meal was $5 – $7 higher, while oil was 155–175 lower. After briefly violating support at last week’s low of $12.04 ½, July-24 rebounded to close a dime off its intraday low and back above its 100 day MA at $12.13 ¼. Nov-24 held above $12.00. July-24 oil is likely carving out a trading range between 42.50 and 46. July-24 meal is building support above $365. While spot board crush margins were little changed, meal gained nearly 1% in PV to 63.2%. Bean oil was the downside leader as it appears the Biden Administration will not be imposing higher tariffs on used cooking oil imports from China. Good rains across the central portion of the Midwest the past 24 hours with heavy rains across the Gulf coast. These same areas are expected to remain in a wetter than normal pattern this week keeping planting progress slow. Lighter precipitation is forecast for the northern Midwest and northern plains. Off and on showers are still expected for northern regions of RGDS, Santa Catarina and southern Parana in the next week to 10 days, keeping flooding concerns and production losses elevated.US planting progress advanced only 10% LW to 35%, slightly below expectations however in line with the 5-year Ave. Conab increased their Brazilian production forecast 1.2 mmt to 147.7 mmt, still below the USDA revised est. of 154 mmt, however the gap has narrowed. Conab pegged yields in RGDS at 3.168 mt per HA, slightly below the national average of 3.229, however indicated this could come down if adverse weather persists. USDA data from Fri. shows production among the top 4 exporting countries reaching a record 352 mmt in 24/25, with stocks/use ratio’s jumping to a 6 year high at 23%. Tomorrow’s NOPA report is expected to show its members crushed 183 mil. bu. in April-24, down from a record 196.4 mil. in March, however still up nearly 6% from the 173.2 in April-23. Oil stocks held by NOPA members is expected to increase 2% to 1.851 bil. lbs., still down 4% from 1.957 bil. in April-23.
WHEAT
While prices closed lower across all 3 classes, MGEX staged a nice recovery to close only $.03 – $.05 lower, more than a dime off the intraday lows. Chicago and KC finished $.11 – $.17 lower. July-24 Chicago traded to a fresh 9 month high overnight, however failed to trade above $7.00. Support at $6.66 held. July-24 KC failed to trade above yesterday’s high before pulling back. The recent price rally for now has stalled very near its 50% retracement level of $7.09. Winter wheat ratings held steady at 50% G/E, well above the 29% G/E from YA. Overall ratings remain the highest since 2020. 57% of the crop is headed, vs. 46% YA and 5-year Ave. of 44%. Spring wheat plantings advanced 14% to 61% complete, well above the 35% pace from YA and the 5-year Ave. of 48%. Jordan passed on their recent tender to purchase 120k mt of wheat citing prices were too high. Conab lowered their 2024 Brazilian production forecast 7% to 9.03 mmt due to reduced acres, likely due to the heavy rains and flooding in RGDS. The USDA est. from last Fri. was 9.5 mmt. USDA data shows 24/25 production from top exporters is expected to remain very near 372 mmt, while stocks/use is expected to continue to drop to 13.4%, the lowest in decades.
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