Written Commentary
SOYBEANS
The soybean complex was sharply lower across the board with soybeans down $.40 – $.62, meal down $4 – $10, while oil was 200 – 250 lower. The soybean complex has shrugged off a recent surge in new crop export announcements as new crop sales remain well off their historical average. There were 50 contracts of soybean oil deliveries. Nov-23 soybeans have plunged to a 2 week low with next support at the 38% Fibonacci retracement at $13.19 ½. Export inspections at 12 mil. bu. were the highest in 12 weeks and slightly above the pace needed to reach the USDA export forecast. The USDA also announced the sale of 132k tons (5 mil. bu.) of soybeans to China and 183k tons of meal to the Philippines. US census crush data for June-23 comes out after tomorrow’s close. Friday’s COT report showed Money managers were net buyers across the soybean complex having added 25k contracts of soybeans, and just over 9k oil and 11k meal. Their combined long positions in the soy complex swelled to just over 245k contracts, the largest in 4 months.
CORN
Prices were down $.16 – $.18 with next support for Dec-23 at $5.02. I will point out however, oat prices surged $.11 – $.12 today. Weekend rains were better than expected while forecasts into August are supportive of improved crop prospects. While extreme heat is still expected to impact the southern plains and delta states for much of the week, a more normal temperature and rainfall pattern is expected across much of the Midwest. AgRural estimates Brazilian 2nd crop harvest has reached 55%, up from 47% LW and well below the 75% pace from YA. Export inspections at 21 mil. bu. were above expectations of 12 – 20 mil., however still below the 28 mil. bu. needed per week to reach the USDA export forecast of 1.650 bil. bu. Ukraine’s Ag. Ministry est. July-23 grain exports at 2.16 mmt, above the 1.6 mmt from July-22. Corn exports accounted for 1.1 mmt in July. South Korea bought 65k mt of Brazilian food grade corn for $276/mt CF for late Oct-23 shipment. Brazilian corn remains priced under US supplies well into the fall. Argentine port authorities have stated that a port workers strike has impacted the shipment of grain. Speculative buying in corn last week was much higher than the day to day est. suggested. MM’s bought 73,529 contracts, flipping their net position to long 26.6k contracts. With no real price trend developing, MM’s haven’t been willing to establish a significant long or short position in corn, allowing their net position to flip back and forth between long and short the past 4 months.
WHEAT
Prices were sharply lower across all 3 classes today with losses reaching $.35 – $.44 bu. Ukraine’s Foreign Minister declared they have reached a tentative agreement with Croatia to use their ports for the export of grain. They also est. that Russian missile strikes destroyed 180k mt of grain over the past 9 days. Recent Russian attacks have not targeted their grain infrastructure. This afternoon the US State Dept. stated the US will attend a Ukraine peace summit in Saudi Arabia, likely this weekend. Dec-23 KC wheat challenged both its 50 and 100 day MA support just above $8.25 before recovering into the close. Dec-23 Chicago violated support at its 100 day MA at $6.95, however held support above the 50 day MA at $6.85 ½. Support for Dec-23 MGEX wheat is at $8.52 ½, where both the 50 and 100 day MA’s converge. Wheat export inspections at just over 21 mil. bu. were well above expectations, a new MY high and well above the 14 mil. bu. needed per week to reach the USDA export forecast. YTD inspections are down 5% from YA, in line with the USDA forecast. SovEcon est. Russian wheat exports have reached 4.4 mmt for July-23, well above the 2.5 mmt from July-22. IKAR reported Russian 12.5% wheat for export fell to $241/mt, down $1 from the previous week. Trade sources est. Algerian bought between 500k – 600k mt of milling wheat for roughly $276/mt CF, likely most from Russia. Winter wheat harvest has likely reached 78-80% complete, vs. the historical average of 83%. Last week MM’s were net buyers of just over 14k contracts Chicago wheat reducing their short position to 40k contracts, their smallest short position since Nov-22. MM’s also bought 10.5k contracts of KC wheat, extending their long position to 23k contracts, their largest position since Nov-22.
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