Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
CORN
Prices were $.03 – $.04 higher today, recovering most of yesterday’s losses. Resistance for Mch-24 rests at the 50 MA at $4.94, with the 100 day at $5.02. Support is at the recent low of $4.70. New crop Dec-24 has remained stuck between $5.00 – $5.20 for the past 6 weeks. Markets added back weather premium ahead of tomorrow’s USDA WASDE report. Conab lowered their Brazilian corn production forecast by less than 1 mmt to 118.5 mmt, well below the November USDA estimate of 129 mmt. Their 1st crop estimate is 27.3 mmt with the 2nd crop at 91.2 mmt. Acres were left virtually unchanged at 21.1 mil. HA. US export sales at 51 mil. bu. were in line with expectations. YTD commitments have reached 1.014 bil. bu. up 35% from YA, vs. the USDA forecast of up 22%. The 11 mil. bu. sold and shipped to China were switched from unknown. After raising their export forecast 50 mil. bu. in November, I see no change to the current USDA estimate of 2.075 bil. in tomorrow’s WASDE report and do not expect any change to their current ending stock forecast 2.156 bil. bu. Brazil’s corn exports in Nov-23 reached a record 7.4 mmt, up 26% from YA. YTD thru November exports have reached 49.9 mmt are up 35% from YA. Sales to China at 14.1 mmt compared to virtually zero from YA. December exports are expected to reach 6.86 mmt, actually down from 7.3 mmt YA.
SOYBEANS
The soybean complex was mostly higher with beans up $.13 – $.16, meal was mixed from down $2 to up $1, while oil surged 160 – 180. Although spot board crush margins held steady at $1.46 bu. soybean oil PV jumped 1% to 38.6% matching a 7 week high. Jan-24 soybeans traded above yesterday’s high at $13.13 ½ before settling back on touch near the close. Support is at the Oct-23 low of $12.70 ¼. Jan-24 oil has traded back above the $.50 level with next resistance at the 50 day MA at $.5214. Jan-24 meal slipped below the 100 day MA support at $404 before recovering. Rainfall the early half of this week across WC Brazil has been disappointing while longer range forecasts are trending warmer and dryer. Soaking rains continue to get pushed back to late in the 2 week outlook. Southern Brazil remains too wet, NE too dry. Argentina remains mostly favorable with crop updates from the BAGE expected later today. Conab lowered their Brazilian soybean est. 2.2 mmt to 160.2 mmt, at the high end of the range of estimates and just below the Nov-23 USDA forecast of 163 mmt. Acres were left unchanged at 45.3 mil. HA. Export sales at 56 mil. bu. were in line with expectations. YTD sales have reached 1.191 bil. bu. down 17% from YA, vs. the USDA forecast of down 12%. China was a net buyer of 20 mil. bu. The USDA announced the sale of 121k tons (4.4 mil. bu.) of soybeans to an unknown buyer. Chinese custom data showed their soybean imports in Nov-23 reached 7.92 mmt, below expectations however up 7.8% for Nov-22. YTD imports have reached 89.6 mmt, up 13% from YA. Brazil’s exports in Nov-23 reached 5.2 mmt, double the amount from Nov-22. YTD exports at 98 mmt are up 28% from YA. While Dec-23 exports are expected to slow to 3.6 mmt, that would be more than double the 1.52 mmt
WHEAT
Prices were higher across all 3 classes with Chicago and MGEX closing $.04 – $.09 higher, while KC was up $.10 – $.12. Chicago Mch-24 closed higher for the 8th consecutive session. Resistance is at yesterday’s high, just below $6.50. Mch-24 KC resistance is at $6.77 ½. Ukraine’s grain infrastructure near the Danube River in the Odesa region was damaged by a Russian drone attack overnight that also killed a driver. Despite the attack Romania’s transportation minister is optimistic Ukraine’s grain exports can reach 4 mmt per month, up from the record 3 mmt in Oct-23. Export sales at 13 mil. bu. were in line with expectations. YTD commitments at 479 mil. bu. are down 4% from YA, vs. the USDA forecast of down 8%. SRW wheat commitments have reached 109 mil. bu. Adding this week’s sales to China brings commitments to 146 mil. 1 mil. bu. above the USDA forecast for the 2023/24 MY that ends at the end of May-24. The current USDA export forecast of 700 mil. bu. is looking 15 – 25 mil. bu. too low. If SRW wheat exports can reach 165 mil. bu. it would be the highest in 10 years. Not sure if that will be reflected in tomorrow’s USDA report. Russia’s offer at $260/mt FOB was the lowest in Egypt’s recent tender with other coming in between $269 – $275/mt. Cash sources suggest they have purchased 420k mt with Jan-24 shipment. No breakdown available just yet.
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