Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
CORN
Prices were down $.01 – $.03 in 2 sided trade. Dec-23 continues to hold below resistance at last week’s high of $4.90. The 50 day MA rests just above this level, while the 100 day MA comes in at $5.12. Crop ratings held steady at 53% G/E in line with expectations. Light to moderate showers are expected to impact parts of the central Midwest between now and Friday before dryer but cooler conditions return. The heaviest rain in the next week are expected in the SE plains and northern delta regions. Only minor harvest delays are expected. Harvest progress at 23% is above YA and the 5-year Ave. however was slightly below expectations. Most yield est. for US corn are coming in between 170 – 176 bpa, vs. the Sept. USDA forecast of 173.8 bpa. Ukraine’s Ag. Ministry has increased their expected grain harvest 1.1 mmt to 57.5 mmt. Corn represents 28.5 mmt of this total, which is just above the USDA forecast of 28 mmt. Corn usage for ethanol production reached 443 mil. bu. in Aug-23. While up 3% from Aug-22, total usage for the 2022/23 MY came in at 5.179 bil. bu. down 16 mil. from the Sept-23 WASDE report. Algeria reported tendered for 60k mt of corn from SA origin for late Oct. shipment. While last Fri stocks report appears to have at least put in a temporary low, we’ll likely need to see much lower production from the USDA to lower 23/24 ending stocks below 2 bil. to enable prices back above $5.00.
SOYBEANS
The soybean complex was lower across the board however recovered to settle well off session lows. Beans finished $.04 – $.06 lower, meal was $1 – $4 lower, while oil was down 30 – 50. Nov-23 soybeans held support right at the June-23 low of $12.56 ¾. Dec-23 meal made a new low for the move, with next support the Spring low of $361.80. Dec-23 oil fell back below its 100 day MA at 57.52. Southern Brazil remains extremely wet while only scattered rains are expected in WC regions of Mato Grosso and MGDS. No significant change to drought conditions in Argentina. The USDA did announce the sale of 265k tons (10 mil. bu.) of soybeans to China. Yesterday’s census crush for Aug-23 at 169 mil. bu. was below expectations and brought total crush for the 22/23 MY to 2.212 bil. bu. down 8 mil. from the Sept-23 WASDE. Soybean oil stocks at the end of Aug-23 were 1.772 bil. lbs. below expectations and the lowest since Dec-2017. Crop ratings increased 2% to 52% G/E, vs. expectations for no change. Harvest progress at 23% was above YA and the 5-year Ave. however in line with expectations. Most yield est. for US soybeans are coming in between 49 – 50.5 bpa, vs. the Sept. USDA forecast of 50.1 bpa. We’ll provide our pre-report estimate in coming days. Usage for biofuel production the past 2 months has averaged 1.240 bil. lbs. Annualized, that comes to nearly 14.9 bil. lbs. well below the current USDA forecast of 12.5 bil. lbs., this in an industry where capacity is expanded, not contracting.
WHEAT
Prices closed higher across all 3 classes with Chicago and MGEX finishing up $.01 – $.04 while KC was up $.05 – $.07. Needed rains are expected across New South Wales the next few days, improving yield prospects there, however Western Australia is expected to remain arid. The USDA announced the sale of 220k tons (8 mil. bu.) of SRW wheat to China. Winter wheat plantings advanced to 40% complete, vs. 39% from YA and the 5-year Ave. of 43%. Ukraine’s Ag. Ministry forecasts their 2023 wheat production at 21.7 mmt, vs. the USDA forecast of 22.5 mmt. Their new crop winter wheat plantings have reached 1.7 mil. HA. EU soft wheat exports as of Oct. 1st have reached 7.4 mmt, down 24% from YA.
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