Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
SOYBEANS
The soybean complex was lower across the board with beans down $.02 – $.07, meal $1 – $2 lower, while oil was down 40 – 55. Nov-23 held above its 50 day MA support at $13.52 ¼. Longer term support is at the 100 day MA, currently $12.99. Oct-23 meal pierced the 100 day MA support at $397.80 intraday, before closing back above it. Support for Oct-23 oil is at its 50 day MA, currently 62.22. Last week MM’s were net buyers across the entire soybean complex purchasing nearly 33k soybeans, just over 3k oil and nearly 21k meal. Soybean crush for July-23 nearly reached 185 mil. bu., up 3.5 mil. from July-22 while matching the record high for the month. With only 1 month left in the 2022/23 MY cumulative crush has reached 2.043 bil. bu. In order to reach the USDA forecast of 2.220 bil. crush in Aug-23 will need to have reached 177 mil. bu., matching the record from Aug-2019. Bean oil stocks for July slipped 2.5% from June to 2.149 bil. lbs., however was slightly above expectations. Export inspections at 14 mil. bu. were in line with expectations. YTD inspections are down 8% from YA, in line with the USDA forecast.
CORN
Prices closed $.04 – $.06 higher as Dec-23 continues to find good support under $4.80. AgRural estimates Brazil’s 2nd crop harvest has reached 88% as of Aug. 31st, vs. 98% YA. They also estimate the 1st season crop for 23/24 is 13% planted, vs. 9% YA. Last week money managers bought nearly 19k contracts of corn reducing their net short position to just over 87k contracts. Index funds were net sellers of just over 2k contracts, reducing their long position to 276,375 contracts, their smallest holding in corn since June-20. Corn used in the production of ethanol in July-23 reached 454 mil. bu., while up 2% from YA and up 3% from June-22, it was roughly 10 mil. bu. below expectations. Export inspections at 19 mil. bu. were at the low end of expectations. Final export inspections for 2022/23 MY came in at 1.467 bil. down 32% from YA, vs. the USDA forecast of down 34%. As of Sept. 3rd EU corn imports have reached 2.7 mmt for the 23/24 MY, well below the 4.55 mmt imported same week YA.
WHEAT
Prices closed steady to up $.05 across all 3 classes today. While Monday’s meeting between Turkish Pres. Erdogan and Russian leader Putin failed to renew the BSGI, there was some positive progress in attempting to prevent global famine. Russia claims they intend to provide up to 1 mmt of grain to Turkey at reduced prices for shipment to countries in greatest need. They also claim they are close to striking a deal to supply 50k mt of grain free of charge to 6 African nations. Turkish media claims their Pres. remains in close contact UN Chief Guterres and plan to discuss the BSGI at this month’s General Assembly meeting. Chicago and MGEX Dec-23 made new contract lows before recovering. KC Dec-23 dipped to nearly a 2 year low before bouncing back. MM’s were net sellers of nearly 9k Chicago wheat last week extending their short position to nearly 80k contracts. Egypt’s GASC reportedly bought 480k mt of Russian wheat on Fri. at $270/mt CF, however many in the trade suspect the govt-to-govt. deal may have done closed to $245/mt. ABARE lowered their Australian wheat production est. by 800k mt to 25.4 mmt, which sits well below the USDA forecast of 29 mmt. SovEcon raised their Russian wheat export forecast by .5 mmt to 48.6 mmt, slightly above the USDA forecast of 48 mmt. Export inspections at 11 mil. bu. were at the low end of expectations. YTD inspections are down 24% from YA, vs. the USDA forecast of down 8%. As of Sept. 3rd EU soft wheat exports have reached 5.0 mmt for the 23/24 MY, below the 7.4 mmt exported same week YA.
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