Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
CORN
Prices finished $.01 – $.02 lower. Dec-23 remains range bound between $4.73 ½ and last week’s high of $4.90. First major resistance is the 50 day MA, currently $5.01. Export sales at 30 mil. bu. were in line with expectations. YTD commitments have reached 439 mil. bu. down 9% from YA, vs. the USDA forecast of up 23%. The USDA new crop export forecast at 2.050 bil. bu. seems optimistic as we come off the record harvest in Brazil. At the moment US corn prices are back to a slight premium to SA supplies. Strategie Grains raised their EU corn production forecast by nearly 1 mmt to 59.6 mmt, in line with the USDA forecast of 59.4 mmt. The Rosario Grain Exchange held their 2023/24 Argentine production est. at 48 mmt, same at the USDA. US corn area in drought expanded a 4th consecutive week to 54%, up 5% from the previous week, however remains below the June peak at 70%.
SOYBEANS
The soybean complex was higher across the board with soybeans up $.09 – $.11, meal was $3 – $5 higher, while oil was steady to up 10. Nov-23 rebounded back above its 50 day MA. Next resistance is this week’s high at $13.73 ¼, followed by the Aug high at $14.09 ½. Next resistance for Oct-23 oil is 63.60, the midpoint between the Aug high and this week’s low. Today’s rally in Oct-23 meal stalled out at its 50 MA, currently 403.20. While agricultural markets have become less sensitive to US weather, it is noteworthy that areas in drought continue to expand. Finishing weather hasn’t been favorable suggesting further declines in both corn and soybean yields moving forward. The US CPC today suggested that El Nino conditions will continue through the northern hemisphere winter with a greater than 95% chance from Jan thru Mch-24. Export sales at 26 mil. bu. were at the low end of expectations. YTD commitments at 612 mil. are down 34% from YA, vs. the revised USDA forecast of down 10%. NOPA crush is due out tomorrow at 11 AM CST. Expectations are for NOPA members to have crushed 167.8 mil. bu., down from 173.3 mil. in July, however above the 165.5 crushed in Aug-22. Oil stocks are expected to have slipped to 1.48 bil. lbs. from 1.527 in July and below the 1.565 in Aug-22. Stats Canada lowered their canola production forecast to 17.37k mt, vs. expectations of 17.9k mt. The Rosario Grain Exchange held their 2023/24 Argentine production est. at 56 mmt, just below the USDA est. of 58 mmt. US soybean area in drought expanded a 3rd consecutive week to 48%, up 5% from the previous week, however remains below the June peak at 63%. For now the trend of higher crush and lower exports remain intact.
WHEAT
Prices were lower across all 3 classes with KC down $.06 – $.08 while MGEX and Chicago were both $.03 – $.04 lower. Ukrainian missile attacks targeted Russian ports and their Black Sea fleet for a 2nd consecutive day. Export sales at 16 mil. bu. were in line with expectations. YTD commitments at 305 mil. bu. are down 19% from YA, vs. the USDA forecast of down only 8%. Stats Canada raised their all wheat production forecast to 29.835 mmt, just below expectations of 30.4 mmt. This week the USDA lowered their forecast 2 mmt to 31 mmt. The Rosario Grain Exchange lowered their 2023/24 Argentine production est. .6 mmt to 15.0 mmt well below the USDA forecast of 16.5 mmt. US winter wheat area in drought held steady at 46% while spring wheat area in drought expanded 3% to 59%, the highest since Feb-23. Japan’s Ag Ministry announced they purchased just over 118k mt of Aussie, Canadian and US wheat at their regular tender. Look for MGEX to outperform both KC and Chicago heading into Q4 as spring wheat supplies continue to tighten while both HRW and SRW rebound.
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