Written Commentary
CORN
Prices were $.06-$.07 lower today with spreads also weakening. Spot Dec-24 held just above its 50 day MA support at $4.04 ½. Next support is the Sept. low at $3.97. Near term resistance is at the September high $4.16. Today’s drought monitor showed another surge in drought readings across key growing areas. Several waves of rain will impact Southern Brazil over the next 7-10 days gradually pushing north into Sao Paulo, Parana and Southern MGDS. Mato Grosso in WC Brazil is expected to remain hot/dry for another week to 10 days with better rain prospects in late Sept. and early Oct. Exports at 33 mil. bu. were in line with expectations and bring 2024/25 commitments to 559 mil. bu. up 21% from YA, vs. the USDA forecast of up less than 1%. Noted buyers last week were Mexico – 11 mil., unknown – 7 mil. and Japan – 5 mil. Prices seem to be shrugging off reports from a major farmer union in Ukraine suggesting this year’s crop will likely only reach 21-22 mmt, well below the USDA est. of 27.2 mmt. If verified exports would likely be limited to only 16-17 mmt, also below the USDA est. of 24 mmt. US corn area in drought surged another 8% LW to 26%. While this is a 6 month high, it’s also well below the 58% from YA.
SOYBEANS
The soybean complex was mixed with beans steady to $.01 lower, meal was mixed from $2 higher to $1 lower while oil was up 45-75. Inside trade for Nov-24 beans with prices consolidating very near the 50 day MA at $10.13 ½. Oct-24 oil closed just below its 50 day MA resistance at 41.78. Inside trading session for Oct-24 meal with resistance at the Sept high at $328.50 and support at $313.40. Spot board crush margins jumped $.13 ½ today to $1.50 bu. with bean oil PV improving to 39.5%. Rain is expected across NE and KS the next few days before pulling east across IA, MO and S MN and into the Great Lakes region by late this weekend. Accumulations of 1.5-3” are expected across a broad stretch of the nation’s midsection by the middle of next week. Little to no rain forecast across the Delta, SE and northern plains. Week 2 of the outlook shows a return to hot and dry conditions for much of the Midwest. Exports at 64 mil. bu. were above expectations and bring 24/25 commitments to 588 mil. down 6% from YA vs. the USDA forecast of up 9%. China/unknown combined to buy 39 mil. bu. bringing YTD commitments to 416 mil. bu. below the 485 mil. from YA and well below the 764 mil. in 2022. Soybean meal sales at 280k tons (-3k – 23/24 MY, 283k – 24/25) were in line with expectations. Old crop commitments are up 8% from YA, vs. the USDA forecast of up 10%. Soybean oil sales at 47k tons (almost all old crop) were well above expectations. Old crop commitments are up 120% from YA vs. the USDA forecast of up 72%. Soybean area in drought jumped another 7% LW to 33%, also a 6 month high however well below the 53% from YA.
WHEAT
Prices were lower across all 3 classes today with Chicago and MGEX down $.08-$.10 while KC was off $.12-$.14. Dec-24 Chicago held support above the 50 day MA at $5.61 ¼ while both KC and MGEX Dec-24 closed below the technical support level. Wheat prices have given back all of last week’s price advance as tensions in the Black Sea region seemed to have calmed for now after last week’s Russian missile struck on a Ukrainian vessel transporting wheat to Egypt. Improved rains for the central US plains also weighed on winter wheat valuations. Exports at 9 mil. bu. were below expectations. YTD commitments at 405 mil. are up 28% from YA, vs. the USDA forecast of up 17%. YTD by class commitments are as follows: HRW +72% vs. USDA +79%, SRW -9% vs. -30%, HRS +20% vs. +8.5% and white +52% vs. +25%. Tunisia reportedly bought 100k mt of durum at an average price of $341/mt CF and 125k mt of soft wheat for $246.70/mt CF. The IGC today lowered their global wheat production forecast 1 mmt to 798 mmt, now just above the Aug-24 USDA est. of 797 mmt.
Charts provided by USDA Charts.
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