Written Commentary
CORN
Prices were $.02-$.03 higher today. Sept-24 peaked right at the $4 level with support building at $3.90. Dec-24 continues to chop sideways within last Friday’s range of $4.03-$4.16 ½. Early strength largely attributed to the US $$$ index falling to a 4 month low. Ethanol production surged to 1,106 tbd last week, up from 1,054 tbd the previous week and up 3.4% YOY. Production was the highest since Dec-23 and the 2nd highest of the MY. Corn usage was well above the pace needed to reach the USDA corn usage forecast of 5.450 bil. bu. There was 110.8 mil. bu. of corn used, or 15.8 mil. bu. per day, above the 15.26 mbd needed to reach the USDA. If LW’s production held over the last 7 weeks of the MY, corn usage would reach 5.478 bil. bu. Despite the production surge ethanol stocks slipped to 23.2 mil. barrels, below expectations while matching YA. Coming off the 4th of July Holiday, implied gasoline demand fell 6.5% LW to 8.783 tbd and was down 1% YOY. Global basis has firmed as Brazil’s harvest winds down and drought continues to chip away at Ukraine’s production. Export sales tomorrow are expected to range from 22 – 48 mil. bu. old and new crop combined.
SOYBEANS
Bull spreading was the prominent feature in the soybean complex today as deliverable receipts for all 3 legs showed net cancellations. Beans were up $.07 in spot Aug-24 to down $.02-$.03 in new crop. Meal recovered late to close $2-$4 higher, while oil sold off closing 50-100 lower. Aug-24 beans were able to fill a gap on the charts from the Sunday night open between $11.01 and $11.02 ½. Inside trade for Nov-24 beans as it consolidates just below $10.50. Not much resistance for Aug-24 meal until the 100 day MA at $349.50 with support at $330. Outside day down for Aug-24 oil however held support at its 100 day MA just above $.46. Spot board crush margins slipped another $.04 to $1.57 bu. US weather forecasts remain non-threatening thru the end of the month. Rainfall over the next 5-7 days will be heaviest across the southern Midwest. Very little rain for the Great Lakes region and northern plains. Scattered moisture for the WCB. Temperatures for a vast majority of the Midwest to remain normal to below for the next 2 weeks. Much above normal temperatures in the far West may creep into the northern plains by week 2 of the outlook. China reportedly booked several mt’s of Brazilian soybeans the first 2 weeks of July taking advantage of the lower price and selloff in the Brazilian real. The subsequent rebound and now leveling off in the real has enabled US FOB prices to become competitive again. Talk is circulating China has booked up to 6-7 US cargoes off the PNW for late summer shipment. A day after making their largest wheat purchase in 2 years Egypt’s GASC is tendering for vegetable oil for Sept. shipment. Export sales tomorrow are expected to range from 10 – 35 mil. bu. of beans, 100 – 450k mt of meal, and 0 – 20k mt of oil.
WHEAT
Prices were $.08-$.14 higher across all 3 classes today. Support for Sept-24 Chicago is at the weekly low from March at $5.19 ½. A day after Egypt’s GASC made their largest wheat purchase in 2 years, Algeria is reportedly booking milling wheat. Sources suggest prices have ranged from $241-$244/mt CF with total volume around 600k mt. Much if not all of the wheat is being sourced from the Black Sea region of Russia, Ukraine and Bulgaria. A German farmer co-op lowered their wheat production forecast 6.2% to 20.2 mmt. Following lower production est. from France it would seem the USDA EU all wheat production forecast at 130 mmt is likely 5 mmt to high. Export sales tomorrow are expected to range from 8 – 22 mil. bu. Dryness in the PNW should enable the remaining winter wheat harvest to move along at a rapid pace.
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