Written Commentary
CORN
Prices were up $.03-$.04 closing near session highs. Support for Sept-24 is at Monday’s contract low at $3.72 ½ with resistance at the 50 day MA at $3.93 ¼. Similar story with Dec-24 between $3.90 and $4.08 ½. A Ukrainian farm group suggests if they do not get drought relief soon their 2024 corn crop could fall to 20-21 mmt, down from 30 mmt YA. The USDA lowered their 2024 production forecast .5 mmt on Monday to 27.2 mmt. Ukraine’s 2024/25 grain exports have reached 5.26 mmt, well above the 3.12 mmt from YA. This total includes 2 mmt of corn. US ethanol production increased to 1,072 tbd last week, up from 1,067 tbd LW and was marginally higher than YA. There was 108 mil. bu. of corn used, or 15.4 mil. bu. per day, above the 15.07 mbd needed to reach the USDA. Ethanol stocks fell to 23.4 mil. barrels, below expectations and in line with YA. Implied gasoline usage last week rose 1% to 9.045 tbd, and was up 2% YOY. The old adage “big crops keep getting bigger” seems to have broken down over the years. Recent history shows that when the USDA raises yields in Aug., final US yields are often below what was projected in Aug. That’s exactly what has happened the last 5 time yields were raised in Aug. and 11 of the 17 times since 1990. Export sales tomorrow are expected to range from 20-50 mil. bu.
SOYBEANS
The soybean complex was mixed with beans up $.05-$.06, meal was $4-$5 higher while oil was down 30–40. New contract lows overnight for both Sept-24 and Nov-24 beans before today’s recovery. Despite the price rebound bean spreads remain weak with several making new lows. Inside trading session for Sept-24 meal which for now has rejected trade below $300 per ton. Sept-24 oil dipped below $.40 lb. intraday however held support above its contract low at $.3967. Spot board crush margins have rebounded $.03 ½ to $1.59 bu. with oil PV falling back below 40%. A non-threatening US weather forecast will likely limit upside potential. Good rains in the past 24 hours were noted across the southern half of NE, SW IA and MO. Rain is expected to favor the northern plains along with the central and ECB thru the upcoming weekend. Very little addition moisture offered for the central and southern plains thru early next week. Extended forecasts leaning toward a dryer than normal pattern for the nation’s midsection the last week to 10 days of August. The last 4 times the USDA raised bean yields in August, the final yield estimate was below the Aug. forecast. This has also occurred 8 of the 13 times since 1990. NOPA crush from July is due out tomorrow at 11 AM CST. Oil stocks are expected to slip to 1.608 bil. lbs. down from 1.622 bil. the previous month. Bean oil remained under pressure as California has moved to limit low carbon fuel credits to 20% of soybean and canola oil used for biodiesel and renewable diesel production starting in 2028. After being heavy sellers the past few sessions we expect Friday’s COT report to show MM’s extending their record short position to just over 200k contracts. Export sales tomorrow are expected to range from 20 – 50 mil. bu. for beans, 200-600k tons for meal, and 0-20k tons for oil.
WHEAT
Prices were little changed in uneventful 2 sided trade. Both KC and MGEX were steady to $.02 lower, while Chicago was up $.02-$.05. AgriMer in France suggests their wheat harvest is showing varied degrees of protein levels across the region however will likely average close to YA. Ukraine’s 2024/25 wheat exports have reached 2.04 mmt. Good rains across ND and MN this week will slow spring wheat harvest activities. There have been 6 years since 2010 where the USDA raised winter wheat production in June, July and August (like this year). In 4 of those years final production was below the August estimate and only 2 times it was higher, including last year. Export sales tomorrow are expected to range between 8-18 mil. bu.
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