Written Commentary
The Ghost in the Machine Q4 2024
November 15, 2024
CORN
Prices were $.02 lower in rather quiet 2 sided trade. Open interest dropped over 20k contracts yesterday suggesting the late day recovery was short covering in nature. Census exports in June at 216 mil. bu. were roughly 21 mil. above the weekly inspection data. Cumulative exports over the first 10 months of the 23/24 MY have reached 1.882 bil. bu. In order to reach the USDA forecast of 2.225 bil. exports will need to reach 343 mil. in July/Aug vs. only 195 mil. YA and 310 mil. in 21/22. Brazil’s Ag. Ministry reports their corn exports in July reached 3.553 mmt down 16% from YA. IkrAgroConsult lowered their 2024 Ukraine production forecast 1.4 mmt to 26 mmt due to hot/dry conditions in July. This compares to the USDA forecast of 27.7 mmt. EU corn imports for 24/25 MY as of Aug. 4th reached 2.11 mmt, up 30% from YA. Crop ratings slipped 1% to 67% G/E vs. in line with expectations. Ratings suggest an overall US yield of 183.9 bpa vs. the July USDA forecast of 181. Conditions improved in 8 states, declined in 8 while holding steady in 2. 88% of the crop is silking very near the 90% YA and the 5-year Ave. of 88%. 46% of the crop is in dough stage vs. 42% YA and 5-year Ave. of 38%. 7% of the crop is dented.
SOYBEANS
The soybean complex was lower across the board today with beans down $.16-$.18, meal was $5-$8 lower (Aug-24 down $13) while oil recovered to close down only 20-30. Sept-24 soybeans were unable to extend gains after yesterday’s key reversal day. A new contract low for Sept-24 oil trading below $.40 is early trade before recovering. Sept-24 meal traded to a 6 week high however was unable to seriously challenge the 100 day MA at $345.10 before backing up. US weather remains non-threatening. Healthy rains blanketed the Great Lakes region the past 24 hours. Cooler than normal temperatures will cover much of the Midwest for the next week to 10 days. Spot board crush margins slipped another $.15 today to $1.86 bu. Census soybean exports in June at 49 mil. bu. were in line with the weekly inspections data. Cumulative exports over the first 10 months of the 23/24 MY have reached 1.581 bil. bu. In order to reach the USDA forecast of 1.70 bil. exports will need to reach 119 mil. in July/Aug vs. 109 mil. YA. A Brazilian farm group expects 2024/25 soybean acres will expand by less than 1% with prices hovering just above 4 year lows. The USDA acreage forecast at 47.3 mil. HA represents a 3.3% increase over YA. Planted acres rose 4.5% in 23/24 to 46 mil. hectares while jumping 6% in 22/23. EU soybean imports for 24/25 MY as of Aug. 4th reached 1.12 mmt, down 17% from YA. Their meal imports at 1.77 mmt are up 8% YOY. Brazil’s Ag. Ministry pegged July-24 exports at 11.25 mmt, well above the 9.70 mmt from July-23. US crop ratings rose 1% to 68% G/E vs. expectations of a 1% decline. Current ratings suggest an average yield of 53.9 bpa, vs. the July USDA forecast of 52 bpa. 86% of the crop is blooming vs. 88% YA and above the 5-year Ave. of 84%. 59% of crop is setting pods vs. 61% YA and 5-year Ave. of 56%.
WHEAT
Prices were $.02-$.05 higher across all 3 classes in uneventful 2 sided trade. Spring wheat areas of Russia likely to stay in an above normal rainfall pattern. Better prospects for rain are expected for southern and eastern growing areas of Argentine benefiting their wheat and barley crops. The US foreign Ag. service post in Spain cut their EU production forecast to 127.4 mmt, below the official USDA est. of 130 mmt. Argus Media expects France’s soft wheat crop will only yield 5.93 mt per HA, down 19% from the 5 year Ave. They also forecast production at only 15.2 mmt, a 41 year low. Egypt’s GASC is seeking up to 3.8 mmt of wheat with a deadline offer date of Aug. 12th. Shipment is for Feb-April 2025. Jordan passed on their 120k mt wheat tender citing too high of price. US census exports in June (1st month of the 24/25 MY) at 55 mil. bu. were in line with the weekly inspections and up 29% from YA. EU soft wheat exports as of Aug. 4th at 2.18 mmt are down 39% from YA. US winter wheat harvest advanced to 88% in line with recent history. Spring ratings held steady at 74% G/E, vs. expectations for a 1-2% drop. Composite ratings slipped to 83 still the highest since 2018. 6% of the crop is harvested vs. 8% YA and the 5-year Ave. of 10%.
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