Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
WHEAT
Prices turned mostly lower by today’s close, unable to maintain early strength. KC and MGEX were down $.06 – $.08 while Chicago was mixed, within a few cents of unchanged. Technically Mch-24 Chicago wheat extended the consecutive higher closes to 7 sessions. At today’s peak Mch-24 Chicago has rallied over $.90 from last week’s low, while KC has surged just over $.80. The USDA announced another sale of 372k tons (13.6 mil. bu.) of SRW wheat to China bringing this week’s sales to 37 mil. bu. Add this to the last week’s commitments at 108 mil. bu. brings YTD SRW wheat commitments to 145 mil. matching the USDA forecast for the 2023/24 MY that ends at the end of May-24. Starting to look like the USDA export forecast at 700 mil. bu. is 15 – 25 mil. bu. too low. At minimum will need to shift by class sales to SRW. It’s also believed that Algeria bought up to 500k mt of durum wheat from Mexico and Canada with prices ranging from $455-$470/mt CF. Census exports for Oct-23 at 40 mil. bu. were well below the 68 mil. bu. from Sept-23 and the 51 mil. in Oct-22. In the first 5 months of the 2023/24 MY wheat exports have reached only 270 mil. bu. down 28% from YA, vs. the USDA forecast of down 8%. Export sales tomorrow are expected to range from 10 – 30 mil. bu.
CORN
Prices failed to hold early strength and closed $.05 – $.06 lower. The early bounce in Mch-24 corn was capped just below the 50 day MA resistance at $4.94. Ethanol production last week surged to 1,076 tbd, up from 1,011 tbd the previous week and the highest level since July-23. There was 108 mil. bu. of corn used in the production process, above expectations and well above the pace needed to reach the corn usage forecast of 5.325 bil. bu. Gasoline demand rebounded 3.2% from the previous week to 8.466 mil. barrels per day, and was up 1.3% YOY. Census exports for Oct-23 fell to 111 mil. bu. down from 125 mil. in Sept-23, however well above the 82 mil. from Oct-22 and roughly 13 mil. bu. above the pace of weekly inspections. In the first 2 months of the 2023/24 MY corn exports have reached 235 mil. bu. up 27% from YA, vs. the USDA forecast of up 22%. With rumors of China cancelling up to 10 cargoes of Brazilian corn yesterday, perhaps some disappointment there were no fresh sale announcements from the USDA. ANEC expects Brazilian corn exports will reach nearly 56 mmt in 2023, up 25% from 2022. Export sales tomorrow are expected to range from 30 – 60 mil. bu.
SOYBEANS
The soybean complex was lower across the board with beans $.10 – $.15 lower, meal was down $5 – $9, while oil was 80 – 90 lower. Jan-24 soybeans are back below $13 carving out its lowest close in nearly 2 months. Next support is the Oct-23 low at $12.70 ¼. Jan-24 oil traded to a 4 week low with next support at 48.53. Jan-24 meal managed to hold above the weekly low and just above the 100 day MA support at $404.40. A more favorable SA forecast along with sharply lower energy prices more than offset fresh Chinese demand and early speculative buying. Spot board crush margins slid $.20 today to $1.46 bu., its lowest level in 5 months. The USDA announced the sale of 136k tons (5 mil. bu.) of soybeans to China, confirming yesterday’s rumored sale. Census exports for Oct-23 at 348 mil. bu. were well above the 91 mil. bu. from Sept-23, however down slightly from the 359 mil. bu. in Oct-22. Census numbers exceeded the weekly inspection data by roughly 11 mil. bu. In the first 2 months of the 2023/24 MY bean exports have reached 439 mil. bu. up less than 1% from YA, vs. the USDA forecast of 12%. ANEC expects Brazilian soybean exports will reach 101 mmt in 2023, up 30% from 2022 while meal exports are expected to be up 10% from YA. Export sales tomorrow are expected to range from 35 – 65 mil. bu. for beans, 100 – 300k tons meal, and 0 – 15k tons oil.
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