Written Commentary
CORN
While there was little change in flat price today, spreads continue to firm. For now Dec-24 corn has rejected trade below $4.00 however failed to crack near-term resistance is at the 50 day MA at $4.07 ½. The Dec-24/Mch-25 spread has traded into $.14 ¼ , the tightest since late July. The USDA announced the sale of 197k mt (7.8 mil. bu.) of corn to Mexico and 101k mt (4 mil. bu.) to an unknown buyer. Ethanol production rebounded to 1,042 tbd last week, up from 1,038 tbd the previous week and up less than 1.0% from YA. There was 105 mil. bu. of corn used, or 14.96 mil. bu. per day just above the 14.94 mbd needed to reach the USDA forecast of 5.450 bil. In the MY to date there has been 609 mil. bu. used, or 14.87 mbd, an annualized pace of 5.426 bil. Ethanol stocks ticked up to 22.3 mil. barrels, just above the 21.1 mb from YA. Implied gas demand fell 10.7% LW to 8.620 mil. barrels per day and was down 3.6% YOY. US corn acres in drought surged 13% in the past week to 62%, the highest in the past year. Export sales tomorrow are expected to range from 50-85 mil. bu.
SOYBEANS
Prices surged late resulting in a higher close across the complex. All red on the quote board this morning turned to all green on the screen this afternoon. Beans were up $.02-$.09 with the Nov/Jan spread narrowing all the way into $.09, the highest in 7 months. Meal was up $2-$5 led by spot Dec-24. Oil was 60-90 better. Nov-24 beans traded to a fresh 2 month low before the late day recovery. The 50 day MA at $10.06 ¾ now serves as resistance. Dec-24 oil seems stuck between its 100 day MA resistance at 42.77 and 50 MA support at 41.24. Today’s rally in Dec-24 meal was capped at the 50 day MA at $319.10. Spot board crush margins jumped $.11 today to $1.79 ½, a 3 month high, with bean oil PV back above 40%. No significant change in SA weather with both Brazil and Argentina expecting a good mix of rain and sunshine over the next few weeks, beneficial to planting and crop development. In the US, much of the nation’s midsection will remain dry for another 5-7 days enabling harvest to continue to move along quickly. Week 2 of the forecast continues to lean toward above normal temperatures thru month end however better prospects for above normal rain in the central Midwest and Northern plains. Today’s updated US drought monitor showed a further expansion of drought conditions across key agricultural areas. China’s Ag. Ministry reports their soybean harvest has reached 83% with corn at 70%. US soybean acres in drought jumped 11% to 54%, also the highest in the past year. Export sales tomorrow are expected to range from 36-80 mil. for soybeans, 150-350k mt for meal and 0 – 20k tons for oil.
WHEAT
Prices rebounded to close $.04-$.08 higher across all 3 classes today. Some much needed rains are expected to fill in over the southern US plains thru this weekend. The Dec-24 contracts in all 3 classes are currently stuck between 50 day MA support below the market, and 100 day MA resistance above the market. SovEcon once again lowered their Russian wheat production est. Their current forecast at 81.5 mmt is down 1.4 mmt from their previous est. and would be the smallest crop in 4 years. Last week the USDA lowered their est. to 82 mmt. Starting today the Russian Govt. will allow Kazakhstan to transport grain across Russia for export to other countries however will not allow direct imports in order to protect domestic farmers. Winter wheat acres in drought jumped 5% to 52% while spring wheat acres in drought increased 3% to 32% still well below the 48% from YA. Export sales tomorrow are expected to range from 10-20 mil. bu. Tight stocks among global exporters should benefit US exports.
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