Written Commentary
The Ghost in the Machine Q4 2024
November 15, 2024
CORN
Prices surged late to close $.04-$.07 higher and little changed for the week. Spreads also surged. Deliveries against the Dec-24 contract at 111 contracts were in line with expectations. Mch-25 held support at its 100 day MA support at $4.27 ¼ in early trade. The late day surge enabled prices to challenge its 50 day MA resistance at $4.33 ¼. The BAGE reports Argentine corn plantings advanced 2% to 41% while leaving their production est. unchanged at 47 mmt, well below the USDA forecast of 51 mmt due to a lower acreage estimate. Exports at 45 mil. bu. (42 mil. – 24/25 MY, 3 – 25/26) were in line with expectations. Old crop commitments at 1.278 bil. are up 33% from YA, vs. the USDA forecast of up 1.4%. Current sales represent 55% of the USDA forecast, above the historical average of 47%. Mexico was the only noted buyer with 16 mil. bu.
SOYBEANS
The soybean complex was mixed. Beans were mixed and within $.02 of unchanged. Meal was $1-$2 lower while oil was up 70-90. Bean and oil spreads firmed while meal spreads made new lows. Deliveries against Dec-24 meal were heavy at 776 contracts however in line with expectations. There were no deliveries against Dec-24 oil. Jan-24 beans continue to consolidate between $9.75 and $10. Inside trade for Jan-24 oil as its rally attempt stalled very close to its 100 day MA at 42.53. Support for Jan-25 meal is at its contract low at $287 with longer term support at $280. Global weather remains non-threatening. Much of Argentina and Brazil are forecast to see a good mix of rain and sunshine thru the first full week of December keeping production prospects high. If anything too much rain may induce isolated flooding in southern Brazil. Bean exports at 92 mil. bu. were above expectations and bring YTD commitments to 1.245 bil. up 10% from YA vs. the USDA forecast of up 8%. China/unknown combined to buy 44 mil. bu. bringing commitments to 790 mil. bu. just below the 805 mil. YA. In addition the USDA announced new sales of 992k (36 mil. bu.) to an unknown buyer. I look for no change to the USDA export forecast in the Dec-24 WASDE. Soybean meal sales at 487k tons were at the high end of expectations. YTD commitments are up 13% from YA, vs. the USDA forecast of up 8%. Soybean oil sales at 125k mt (275 mil. lbs.) were well above expectations. YTD commitments at 875 mil. lbs are already well above the current USDA forecast of 600 mil for the 24/25 MY. The BAGE reports Argentine soybean plantings advanced 8% to 44% while holding their production forecast unchanged at 50.8 mmt, vs. the USDA est. of 51 mmt.
WHEAT
Prices were steady to $.02 lower in Chicago and KC while MGEX managed to close fractionally higher. Mch-25 contracts in Chicago and MGEX held above their contracts lows while new lows in KC futures. Deliveries against Dec-24 KC at 105 contracts were in line with expectations. There were 2 contracts delivered against MGEX, while no deliveries against Chicago. Little to no precipitation is expected across the nation’s mid-section over the next 7 days. Extended forecasts suggest below normal temperatures for the eastern half of the continental US, while above normal for the west. Export sales at 13.5 mil. bu. were in line with expectations. YTD sales have reached 557 mil. up 20% from YA, vs. the USDA forecast of up 17%. Commitments represent 68% of the USDA forecast, vs. the historical average of 66%. Shipments are up 32%. By class sales were HRS – 6.5 mil., HRW – 2.7 mil., SRW – 2 mil. and 2.3 mil. durum/white combined. I look for no change to the USDA export forecast of 825 mil. bu. Wire services are reporting Russia’s Ag. Ministry will impose an export quota for wheat at 11 mmt from Feb. 15th thru June 30th. SovEcon recently lowered their Russian wheat export forecast to 44.1 mmt due to tighter export restrictions. In the Nov-24 WASDE the USDA was forecasting exports at 48 mmt.
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