Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
SOYBEANS
The soybean complex closed mixed, with prices down across the board for the week. On the day soybeans were up $.05 – $.15, meal was down $1 – $7, while oil was up 100 – 150. Nov-23 soybeans spent the last 2 days of the week consolidating within Wednesday’s range. Support is at $13.15, with resistance at $13.54. After surging nearly $10 overnight, Oct-23 meal pulled back to close slightly lower however held support at its 100 day MA at $401.50. No export announcements this AM. Spot crush margins slipped $.20 today to $2.81, however remain historically strong. Bean oil product value gained nearly 1% to 43.4%. Linn Group & Associates is forecasting US production at 4.193 bil. bu. with an average yield of 50.7 bpa. Their production forecast is 60 mil. bu. below the July-23 USDA forecast. My crop condition model is currently forecasting production at 4.205 bil. with an average yield of 50.85 bpa.
CORN
Prices held on to close $.02 – $.04 higher, ending a run of 8 consecutive lower closes. For the week Dec-23 corn was $.33 lower. Weak export demand and an improving weather forecast continue to weigh on corn valuations. Weather forecasts remain mostly favorable for US crop development over the next week to 10 days. Healthy rains are forecast for much of the nation’s midsection with the exception being northern ND and the southern plains. Extended periods of above normal temperatures continue to be limited to the deep south. Daily estimates suggest large speculative traders have been net sellers every day since Tues. the 25th, the last effective date for the CFTC data. Today’s COT is expected to show MM’s have flipped back around to being net short corn. Dec-23 did hold support at yesterday’s low of $4.93. Next support is the July low at $4.81. Ukraine’s Ag. Minister estimates harvest so far has brought in 16.6 mmt of grain, of which barley accounts for 3.75 mmt. They also est. corn exports from July 1st thru Aug. 4th at 1.2mmt down 4% from YA. The BAGE est. Argentine corn harvest has reached 73%, below the 81% pace from YA, and historical average of 88%. The US FAS estimates EU corn production at 60 mmt, down from the official USDA forecast of 63.4 mmt. Linn Group & Associates is forecasting US production at 15.045 bil. bu. with an average yield of 175.4 bpa. Their production forecast is 275 mil. bu. below the July-23 USDA forecast. My crop condition model is currently forecasting production at 14.876 bil. with an average yield of 172.3 bpa.
WHEAT
A disappointing day for wheat bulls as prices were not able to hold overnight gains despite increase hostilities in the Black Sea region overnight. A Ukrainian drone attack on a Russian military vessel in the port city of Novorossiysk caused prices to surge overnight. While no damage was done to the port infrastructure, the Russian naval ship appeared to sustain serious damage. Normal port operations have resumed while Russia exporters were quick to inform their customer they will be able to deal with future Ukrainian attacks. This weekend’s peace summit in Saudi Arabia is expected to be attended by a special envoy from China. Russia wasn’t invited to the summit. Chicago managed to close $.03 – $.06 higher, while both KC and MGEX closed $.10 – $.15 lower with both closing near session lows. All 3 classes lost between $.65 – $1.00 this week. Dec-23 KC fell to a 2 month low, next support is $7.60 ¾. Chicago Dec-23 ended a streak of 7 consecutive lower closes. The MM short position has likely swelled back to 100k contracts. The US FAS estimates EU wheat production at 134.6 mmt, vs. the official USDA forecast of 138 mmt. Ukraine’s wheat harvest volume has so far reached 12.5 mmt. While India’s food secretary acknowledge they were considering lowering or eliminating their wheat import tax, they currently have no plans to import wheat from Russia.
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