Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
CORN
Although prices were $.01 – $.03 higher today several spreads made new lows. Resistance for May-24 corn is at last week’s high of $4.34 with support at yesterday’s contract low of $4.08 ¾. GDP data out tomorrow at 7:30 AM CST is expected to show the US economy grew 3.3% in the 4th Qtr of 2023. Lawmakers in Washington continue to negotiate a debt ceiling agreement to avoid a Fed Govt shutdown this Friday Mch. 1st. No export announcements today. Algeria is seeking 80k mt of feed corn in a tender that expires tomorrow. Taiwan’s MFIG is seeking 65k mt of feed corn from SA, South Africa or US in a tender that expires Friday. It’s believed that China bought somewhere between 250k – 600k mt of corn from Ukraine for Spring shipment. Thru Feb. 22nd the Eu has imported 11.5 mmt, down down 41% from YA. The range of estimates for tomorrow’s EIA ethanol production is 1,070 – 1,087 tbd, vs. the previous week’s pace of 1,084 tbd. No way of knowing if we’ve seen a cyclical low or not. Not much has changed fundamentally this week, nor with SA weather. Corn prices could really use a boost from supportive news regarding SAF.
SOYBEANS
: The soybean complex was mixed today with beans steady to down $.05 led by new crop, meal was $3 – $7 lower with bear spreading also noted, while oil was up 50. Resistance for May-24 beans is at last week’s high at $11.92 with support at yesterday’s contract low of $11.33 ½. Both March and May meal established a fresh contract lows today. Next major support on the weekly chart is $309, a low from Oct-2021. Resistance for May-24 oil is at last week’s high at 46.59 with support at last week’s contract low of 44.18. Spot board crush margins slipped $.04 today to $.84 bu. with BO product value surging to 40.7%, a 5 month high. Best rains in the past 24 hours in Brazil were in the deep south in Rio Grande do Sul with many areas receiving 1”+, some as much as 3”. Much of the country will receive a good mix of rain and sunshine the next week to 10 day. The lowest rainfall coverage is expected across SW growing areas of MGDS, western Sao Paulo and NW Parana. Follow up moisture will be needed by mid-March to maintain above trend yield potential. Conditions across most of Argentina are favorable however southern growing will experience net drying over the next 10 days before better rain prospects week 2 of March. The USDA announced the sale of 123k mt (4.5 mil. bu.) of soybeans to an unknown buyer. China reportedly purchases another 4-6 cargoes of Brazilian soybeans for spring shipment. The Indonesian Palm Oil Association projects PO production in 2024 will increase 5% to 57.6 mmt. The same group noted PO exports in 2023 at 32.2 mmt were down 2.7% from 2022 and are expected to drop to 32 mmt in 2024. In 2023 mandatory biodiesel blending requirements were increased 5% to 35%. EU soybean imports thru Feb. 22nd reached 7.7 mmt, on par with YA. Key biofuel capacity and production data is due out on Thursday with crush data from Jan-24 after the close on Friday, pending Fed Govt. shutdown.
WHEAT
Prices were higher across the board today with all 3 classes closing $.07 – $.10 higher. May-24 KC briefly traded above last week’s high at $5.90 before setting back into the close. Next resistance is at the 50 day MA, currently $6.14 ¼. Resistance for Chicago May-24 is at last week’s high of $5.94 ¼. Wheat was the upside leader drawing support from comments from Ukrainian President Zelenskyy who told CNN his country may not be able to defend the Black Sea shipping corridor without additional military assistance from the US. Since establishing the “Humanitarian Corridor” last year following the collapse of the UN sponsored Black Sea Grain Initiative, Ukraine has been able to exports roughly 30 mmt of agricultural good. Wild temperature swings are expected across the US Midwest the next 24 hours however an overall above normal pattern remains intact. Rainfall over the next 5 days to favor the ECB. The southern plains are not expected to see much rainfall thru the first week of March. Jordan reportedly bought 60k mt of optional origin wheat for $240/mt CF for late July shipment. The original tender was for 120k mt. Several US states reported winter wheat conditions yesterday with improvements seen in KN, OK, TX, MT and SD. Ratings declined in CO and NE. Full composite ratings not expected until late March. EU soft wheat exports thru Feb. 22nd have reached 20.5 mmt, down 3% from YA.
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