Written Commentary
CORN
Prices recovered late to close $.02 – $.03 lower. Overnight strength, sympathy with higher wheat prices, was not able to hold given the non-threatening US weather forecast. Support for July-24 is at the 100 day MA at $4.54. Similar story for Dec-24 with support at the 50 day MA at $4.76. The USDA did announce the sale of 215k mt (8.5 mil. bu.) of corn to Mexico. 165k was for old crop 23/24 MY with 50k for 24/25 MY. Export inspections at 42 mil. bu. were in line with expectations. YTD inspections are up 26% vs. the USDA forecast of up 29%. AgRural forecasts Brazilian production to 118.4 mmt, above Conab’s forecast of 111.6 mmt however below the USDA est. of 127 mmt. AgRural est. the 2nd crop in center south region to be 2% harvested. Ukraine’s Grain Union lowered their countries production forecast 4 mmt to 25.5 mmt, now just below the USDA est. of 27 mmt. MM’s were much bigger sellers of corn last week than expected. After selling 50k contracts, the MM short position has swelled to 121k, still well shy of the record short position of 340k contracts in Feb-24. Wire services are reporting the Ave. est. at 83%.
SOYBEANS
Prices were mixed with beans down $.08 – $.18 with spreads weakening, meal was $6 – $9 lower, while oil was up 50 – 60. July-24 beans had an outside day down with support at LW’s low of $12.24. July-24 meal reached a fresh 5 month high before pulling back sharply. Support is at LW’s low near $365. Resistance for July-24 oil is at the 50 day MA at 46.19. Heaviest rains over the Holiday weekend were across the central Midwest and ECB along with the northern plains. No more than scattered precipitation across the WCB. Rainfall the balance of this week will favor the Southern US plains and WCB with much lighter amounts in the Central and ECB. Temperatures are expected to be cooler than normal the next few days before gradually warming to slightly above normal by this weekend. A warmer, drier outlook is expected to develop across southern Brazil in RGDS, enabling farmer to finish up harvest and better assess production losses from recent flooding. Export inspections at 8 mil. bu. were at the low end of expectations. YTD inspections are down 17.5% vs. the USDA forecast of down 15%. MM’s were net buyers of just over 16k contracts of beans, 15k contracts of oil and nearly 2k contracts of meal. The meal long position has swelled to nearly 101k contracts, and exceeds the combined short position of bean and oil. The MM’s are now net long the soybean complex for the first time this calendar year. China’s Ministry of Agriculture reports their countries sow herd at 39.86 mil. head at the end of April, down only .1% for the month however down 7% YOY. Wire services are reporting the Ave. est. at 66%.
WHEAT
Prices finished higher across all three classes in very choppy trade. Sharply higher trade overnight couldn’t hold during today’s session, however prices were able to recovered to close well above intraday lows. KC was $.08 – $.10 higher while both Chicago and MGEX were up $.03 – $.05. Chicago and KC July-24 contracts both established fresh 9 month highs overnight before pulling back. Support for July-24 Chicago is at LW’s low of $6.82. The overnight high in July-24 KC stopped just shy of the 68% Fib. retracement at $7.48. Better prospects for rain across the southern US plains may ultimately prove to be too little too late to salvage the HRW wheat in SW Kansas. Export inspections at 15 mil. bu. were above expectations. YTD inspections at 672 mil. are down 6.5% from YA, vs. the USDA forecast of down 5%. IKAR lowered their Russian production forecast another 2 mmt to 81.5 mmt, this is down 11.5 mmt from their forecast only 1 month ago and down 7% from the USDA forecast of 88 mmt. IKAR also lowered their Russian wheat export forecast to 44 mmt, vs. the USDA est. of 52 mmt. SovEcon lowered their Russian production forecast 3.6 mmt to 82.1 mmt. Russian 12.5% protein export wheat ended last week at $247/mt, up from $239/mt the previous week. The Ukraine Grain Union lowered their wheat production forecast nearly 3 mmt to 19.2 mmt, vs. the USDA est. of 21 mmt. MM’s were modest buyers across all 3 classes last week.
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