Written Commentary
CORN
Prices were mixed today as most contracts closed within $.01 of unchanged. Spreads were weaker. Overnight Dec-24 fell to a new low for the week while also violating support at the 50 day MA. Good rains moved across the US Midwest the past 24 hours. Heaviest amounts of 2+” were recorded in E. KS and OK, southern IA and northern MO. Off and on showers are expected to continue into the middle of next week helping ease the recent surge in drought readings. Exports at 92 mil. bu. were in line with expectations. YTD commitments at 1.017 bil. are up 41% from YA, vs. the USDA forecast of up 1%. Current commitments represent 44% of the USDA forecast, above the historical average of 40%. Shipments are up 35%. Noted buyers last week were Mexico – 24 mil. and Japan – 21 mil. Rabobank is forecasting Brazilian corn production at 125 mmt, just below the USDA estimate of 127 mmt. US corn acres in drought increased another 5% this past week to 81%, well below the 36% YA. The European Commission lowered their 24/25 EU corn production forecast 2.1 mmt to 58 mmt, now just below the USDA est. of 59 mmt. Both agencies expect imports to reach 19 mmt.
SOYBEANS
The soybean complex was mixed today with beans up $.03-$.06 while products moved in opposite directions. Meal was down $1-$2 despite the USDA announcing a flash sale of 150k mt to an unknown buyer while oil surged over $.01 per lb. Bean spreads rebounded as deliveries against the Nov-24 contract were in line with expectations at 97 contracts. Today’s rebound in Jan-25 beans was capped just below $10 bu. Next resistance is LW’s high at $10.18. Dec-24 meal fell below $300 however held support above its contract low at $298.50. Dec-24 oil surged to a fresh 3 month high. Spot board crush margins improved $.04 to $1.73 bu. while bean oil PV jumped to a 13 month high at 43%. Bean exports at 84 mil. bu. were a new MY high and in line with expectations. YTD commitments at 965 mil. are up 13% from YA vs. the USDA forecast of up 9%. China and unknown combined to buy 42 mil. bu. bringing commitments to 624 mil. bu. just above the 620 mil. from YA however well below the 914 mil. bu. from 2022. Soybean meal sales at 208k tons were below expectations. YTD sales are down 1% from YA, vs. the USDA forecast of up 9%. Biodiesel and RD production fell 1.3% in August to 455 mil. gallons, however was well above the 411 mil. gallons from Aug-23. Industry capacity fell for a 2nd consecutive month to 6.593 bil. gallons annually with all of the decline coming from biodiesel capacity. RD capacity held steady at just below 4.6 bil. gallons annually. There was 1.217 bil. lbs of bean oil used in the production of biofuels in Aug-24. Usage in Sept-24 will need to reach 1.092 bil. lbs. to hit the 24/25 USDA usage estimate of 13 bil. lbs. US soybean acres in drought rose 5% LW to 73%, well above the 38% from YA.
WHEAT
Prices recovered late to close down only $.03-$.07. All 3 classes were able to hold support above their respective lows for the week. Exports at 15 mil. bu. were in line with expectations and bring YTD sales to 496 mil. up 19% from YA, vs. the USDA forecast of up 17%. Commitments represent 60% of the USDA forecast, slightly below the historical average of 61%. YTD by class commitments are: HRW +49% vs. USDA +64%, SRW -17% vs. -27%, HRS +14% vs. +13% and white +46% vs. +28%. I do not expect the USDA to change their export forecast of 825 mil. bu. next Friday. Russia continues to offer wheat between $230-$235/mt FOB, down from $237 at the end of LW and also below the $240 floor price they were suggesting earlier in Oct. Trade sources indicate Algeria bought between 480k-500k mt of milling wheat at $263/mt CF with the bulk of the grain sourced from Bulgaria and Romania. US winter wheat acres in drought rose 4% to 62% while spring wheat acres in drought rose 3% to 40%. The European Commission lowered their EU soft wheat production forecast 2 mmt to 112.6 mmt while also lowering their soft wheat export forecast 1 mmt to 25 mmt.
All charts provided by QST.
>>See more market commentary here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
