Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
CORN
Prices closed $.02 – $.03 higher in a rather quiet 2-sided trade. Dec-23 spent much of the session consolidating near its 50 day MA at $4.85 ¾ before firming up in late trade. Heavy rains will start impacting much of the northern 2/3rd’s of the nation’s midsection over the next 24 hours. Cumulative rainfall of 1.50-3.0+” today thru this weekend will be widespread causing harvest delays into early next week. The southern third of the Midwest along with ND likely will see little to no moisture. Corn conditions held steady at 53% G/E, in line with expectations. A few key states saw notable rating declines with IL down 8% in G/E while NE was down 6%. Conditions remain slightly better than YA and below the 5-year Ave. Harvest progress advanced to 34%, in line with expectations. Brazil’s corn exports are expected to reach nearly 9.2 mmt in Oct-23, up nearly 50% from Oct-22. If realized this would be a record high for any month. Brazil continues to offer corn at costs just below the US into year end. Ukraine’s grain exports July 1st thru Oct. 11th are down 28% from YA. Corn shipments at 2.9 mmt are down 48%. Our production estimate for tomorrow’s USDA report is 15.120 bil. bu. with an average yield of 173.6 bpa, just below the Sept-23 USDA forecast of 15.134 bil. and yield of 173.8 bpa.
SOYBEANS
The soybean complex was lower across the board with beans down $.12 – $.19, meal was steady to $2 lower, while oil was 50 – 70 lower. Spreads widened with today’s lower trade. Nov-23 soybeans closed into a new 4 month low. Next support is the 62% Fibonacci retracement at $12.45 ½. Dec-23 bean oil held above yesterday’s 4 month low at 52.24. Both Argentina and WC Brazil have better prospects for some much needed rain in the 2nd half of Oct. Still too much rain across Southern Brazil which will likely lead to reduced wheat production and quality. The USDA did announce sales of 121k tons (4.4 mil. bu.) to China and another 213k tons (8 mil. bu.) to an unknown buyer. Soybean conditions slipped 1% to 51% G/E, in line with expectations. IL saw ratings fall 8% in G/E while NE was down 5%. Harvest has reached 43%, vs. 41% YA and the 5-year Ave. of 37%. Brazil’s soybean exports for Oct-23 are expected to reach 6.8 mmt, nearly double the 3.6 mmt from Oct-22 and would represent a record high for the month. Black Sea sunflower oil’s premium to palm oil has fallen to $45/mt, down from $400/mt YA as exporters have been aggressively pricing the vegetable oil. Prices of SF oil for shipment into India in Oct are quoted at $895/mt CIF, vs. $850/mt CIF for palm oil. Our production est. for tomorrow’s USDA report is 4.155 bil. bu. with an average yield of 50.2 bpa, just above the Sept-23 USDA forecast of 4.146 bil. and yield of 50.1 bpa. Since 1990 there have been 10 years where the USDA lowered both production and yield in their Aug and Sept reports. In 8 of those years final production was actually above that from Sept, while only 2 years it was lower. Despite a hot/dry August, bean conditions held in much better that 2003 and 1999.
WHEAT
Prices were down $.02 – $.05 across all 3 classes today. Dec-23 KC held ½ above its 2 year low set late last month. Winter wheat plantings have reached 57%, in line 5-year Ave. 29% of the crop has emerged. Yesterday Russia reportedly sold 480k mt of wheat to Egypt’s GASC for $265/mt FOB in a privately negotiated deal. This afternoon Egypt’s GASC announced snap tender for wheat with offers due tomorrow. Ukraine’s wheat exports since July 1st have reached 3.76 mmt, steady with YA. Ukraine has kept their 2024 winter wheat acreage forecast steady at 4.4 mil. HA, of which 2.35 mil. HA have been planted.
See more market commentary here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2024 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
