Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
SOYBEANS
The soybean complex was mostly lower with beans down $.10 – $.20, meal was $4 – $6 lower, while oil was mixed closing within 20 points of unchanged. It was an outside day down in Nov-23 soybeans with prices briefly dipping below the July low of $13.15 ½. Next support is the 50 day MA at $12.97 ½. Oct-23 meal slipped to fresh 2 week lows, next support is the 50 day MA at $393.30. Census crush in June at 174.6 mil. bu. was at the low end of expectations. Cumulative crush for the 2022/23 MY has reached 1.858 bil. bu. up .6% from YA, in line with the USDA forecast. To reach the current est. of 2.220 bil. bu. crush in July/Aug will need to reach a record 362 mil. bu., just above the previous record of 360 in 2020. Oil stocks fell to 2.202 bil. lbs., at the low end of expectations and well below the 2.316 bil. from YA. Brazil’s Ag. Ministry reports July soybean exports reached 9.9 mmt, up from 7.5 mmt YA. Still no reported sales to China. Spot board crush margins improved another $.10 today to $3.05, within $.35 of last year’s record high. Export sales tomorrow are expected to range from 55 – 95 mil. bu. soybeans, 100 – 500k tons meal, and 0 – 10k tons oil.
CORN
Prices were down another $.05 – $.09 with Dec-23 also experiencing an outside day down. Next support for Dec-23 is the July low of $4.81. Weather forecasts are mostly favorable for crop development for the next week to 10 days. The extreme heat from last week has been compressed to the deep south and southern plains. Even Kansas appears to see temperatures set back to the 80’s by the end of the upcoming weekend after nearly 2 weeks of 100+ degree heat. Good moisture is forecast for much of the western and central corn belt by early next week. Still hot/dry in TX while much of the eastern corn belt will see below normal rainfall. If verified we’ll likely see crop conditions rebound next Monday. Census corn usage for ethanol production reached 442 mil. bu. in June-23, in line with expectations. Cumulative usage for the 2022/23 MY has reached 4.280 bil. bu. down 3.8% from YA, vs. the USDA forecast of down only 2%. Usage would need to reach 945 mil. bu. July/Aug to reach the current USDA forecast of 5.225 bil, well above the 876 mil. used YA, however below the record of 965 mil. bu. in 2018. In this morning’s weekly report, ethanol production slipped to 1,067 tbd last week, down 2.5% from the previous week, however was in line with the weekly level needed to reach the USDA forecast. Implied gasoline demand fell 1% from the previous week, however was up 3.5% from same week YABrazil’s Ag. Ministry reports July exports were 4.3 mmt, just above the 4.1 mmt from July-22. Export sales tomorrow are expected to range from 20 – 45 mil. bu.
WHEAT
Prices were lower across all 3 classes with KC $.15 – $.18 lower, Chicago was down $.08 – $.12, while MGEX was $.05 – $.07 lower. The low in Dec-23 KC at $7.89 ½ matched the low from July. Dec-23 MGEX has rebounded off support at its 50 and 100 day MA’s near $8.54. Yesterday there was hope Russia would rejoin the Black Sea Grain Initiative. Overnight those hopes were dashed, at least temporarily, when Russia launched additional drone and missile strikes on Ukrainian grain facilities in the port city of Izmail along the Danube river. Prices initially surged overnight, however were unable to maintain strength during the day session as favorable weather and lower equity prices weighed on commodity valuations. Russia has maintained the position that they are willing to return to the UN grain deal once their demands for grain and fertilizer exports are met. Egypt’s GASC bought 360k mt of wheat with their recent tender for shipment in early Sept-23. 300k was from Russia at $260/mt CF, with remaining 60K from Romania at $262/mt CF. After today’s purchase the countries Supply Ministry stated they have enough wheat reserves to cover 6 months of usage. Ukraine’s Deputy PM estimates that overnight attacks damaged 40k mt of grain that was earmarked for Africa, China, and Israel. Export sales tomorrow are expected to range from 8 – 20 mil. bu. Kazakhstan’s grain union forecasts their 2023 wheat production at 14.5 mmt, down from 16.4 mmt YA. Ukraine’s President Zelensky claims “Russian President Putin is seeking a historic collapse of global food markets and supplies.”
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