Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
CORN
After rejecting trade below $4.70 yesterday, prices today rejected trade above $4.80 closing down $.06 – $.07. A rally in the US $$$ and weak export demand drove a “risk off” mentality today. The US $$ index surged to a new 6 month high overnight following statements yesterday afternoon from Fed Reserve chairman Powell that interest rates were likely to remain higher for longer in the continued fight against inflation. Open interest was up another 19k contracts yesterday suggesting additional money coming into the market, rather than a short covering bounce. Strength in Brazil’s corn basis has made US corn a bit more competitive in the global marketplace in recent days. This morning the USDA announced the sale of 137k tons (5.4 mil. bu.) of corn to Mexico. Today’s export sales report showed only 22 mil. bu. of corn were sold last week, at the low end of expectations. YTD commitments at 462 mil. are down 6% from YA, vs. the USDA forecast of up 23%. The current USDA export forecast of 2.050 bil. bu. continues to look overly optimistic. US corn area in drought increased another 4% to 58%, the 5th consecutive weekly increase however below the peak of 70% in June.
SOYBEANS
The soybean complex was lower across the board today with soybeans $.22 – $.26 lower, meal was down $6 – $7, while oil was 90 – 110 lower. Nov-23 beans closed below support at both the 100 day MA and the $13 level. Next support is the Aug-23 low at $12.82 ¼. Oct-23 meal held support above this month’s low of $389. Oct-23 oil closed below support at the Sept low however has held above the Aug-23 low at 59.40. US weather features heavy rains across the central Midwest and Northern plains over the next 5 days that will delay harvest progress. The best harvest progress between now and early next week will be the far western and eastern corn belt. While extreme heat continues to blanket much of Central Brazil, better prospects for moisture arrive in late Sept into early Oct. however no general soaking rains are likely. Export sales at only 16 mil. bu. were below expectations and the lowest for this week in the MY in over 20 years. YTD commitments at 628 mil. are down 34% from YA, vs. the USDA forecast of down 10%. The current USDA export forecast of 1.790 bil. bu. suggests the US share in global trade will fall to 29% just above the historical low of 28%. Soybean meal sales at 452k tons were in line with expectations. US soybean area in drought increased 5% to 53%, the 4th consecutive weekly increase however below the peak of 63% in June. For now the threat of lower US production is being more than offset by slowing demand and fund long liquidation. Argentina’s Ag Ministry kept their 2023/24 planted area est. unchanged at 16.0 mil. HA, up from 15.0 YA however below the USDA forecast of 16.4 mil. HA.
WHEAT
Prices were lower across all 3 classes with Chicago down $.10 – $.13 while KC and MGEX were down $.13 – $.18. Ukrainian Pres. Zelenskiy is in Washington DC today meeting with both parties of Congress. The Biden administration held talks last night with Congress seeking another $24 bil. in military and humanitarian aid to Ukraine on top of the $113 bil. already provided. Yesterday Algeria completed a purchase of nearly 600k mt of wheat between $274 – $275/mt C&F while Egypt’s GASC bought 120k mt of Romanian wheat for $272/mt C&F. A South Korean miller bought just over 94k mt of US wheat that included SRW, HRW and dark northern spring. US export sales at 11 mil. bu. were at the low end of expectations. YTD commitments at 317 mil. bu. are down 17% from YA, vs. the USDA forecast of down 8%. US winter wheat area in drought increased 1% to 47%, while spring wheat area in drought held steady at 59%. Argentina’s Ag. Ministry lowered their wheat planted area forecast by .2 mil. HA to 5.6 mil. HA. Like soybeans, the US wheat exports continue to slip in the global marketplace.
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