Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
CORN
Prices closed $.05 – $.10 lower today, making lows near the close. Spreads also gave back a large portion of yesterday’s rally. Earlier strength in Dec-23 stalled right at its 100 day MA at $5.09 ½. This was the highest trade in 2 ½ months. Corn open interest yesterday shot up just over 47k contracts suggesting new money coming into the market, not just a short covering rally from speculative traders. Brief harvest delays are expected this weekend in the eastern corn belt. The WCB will see good harvest conditions into early next week before widespread moisture moves northeast from the southern plains into the central Midwest by middle part of next week. As of today, Ukraine’s grain and oilseed harvest has reached 57.6 mmt, which includes 9.3 mmt of corn and 5.9 mmt of barley. The BAGE estimates Argentina’s corn plantings advanced less than 1% last week to 20% complete. They kept their acreage forecast unchanged at 7.3 mil. HA. US corn area in drought fell 9% last week to 50%, the lowest in 6 weeks.
SOYBEANS
The soybean complex was mostly lower with beans down $.06-$.13, bear spreading noted, meal was mixed from up $1 in spot Dec-23 to down $3, while oil has steady to 30 higher in spot Dec-23. Nov-23 beans made a new monthly high overnight, stalling right at its 100 day MA at $13.18 ½ for the 2nd consecutive session. Spot board crush margins surged $.19 to $2.18 bu. a 4 week high. Markets seem to be placing a great deal of confidence in the extended forecasts. Hot, dry conditions will continue in WC Brazil into early next week, however the last week of Oct. does offer better prospects for scattered showers. After a brief pause another round of heavy rains are expected over southern Brazil by the middle of next week into the following weekend. Rains over key growing areas of Argentina are expected over the next week to 10 days. Soybean OI was down just over 14k contracts yesterday, largely due to liquidation of the Nov-23 contract. OI increased in the products with meal up just over 1,500 contracts while oil surged nearly 9,200 contracts. Ukraine’s oilseed harvest has reached 18.4 mmt with 10.2 mmt of sunflower seed, 4 mmt of rapeseed and just under 4 mmt of soybeans. Chinese customs data showed they imported 7.15 mmt of soybeans in Sept. down 7% from Sept-22. Just over 96% of the imports were from Brazil. Dreyfus announced plans to begin construction of a soybean crushing plant in Ohio early in 2024. The facility will be able to process over 150k tons annually. US soybean area in drought fell 5% last week to 53%.
WHEAT
Prices in all 3 classes closed lower today, unable to hold early strength. All classes were down $.04 – $.08 with bear spreading noted, particularly in Chicago. Dec-23 Chicago traded above its 50 day MA resistance for the first time in nearly 3 months. Next resistance is the Sept-23 high at $6.15 ½. MGEX Dec-23 has also traded to a new monthly high. Ukraine’s wheat harvest has reached 22.4 mmt. Australian wheat production est. are starting to rise following rains in eastern portions of the island nation earlier in Oct-23. Recent guesses range from 26-28 mmt, above the Oct-23 USDA forecast of 24.5 mmt, which was down 1.5 mmt from Sept-23. The BAGE reports wheat conditions continue to deteriorate with 47% of the crop rated poor or very poor, up 5% from the previous week. 48% of both spring and winter wheat areas are in drought down 3% and 1% respectively from the previous week.
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