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Ag Market View for July 20.23

SOYBEANS

The soybean complex was mixed with the entire complex experiencing 2 sided trade.  Soybeans were mixed with Aug-23 up $.03 ½, while new crop futures were down $.04 – $.06.  An inside trading session for Nov-23 with next resistance at the contract high of $14.48 ¼ from April-22.  Oil was up 100 – 160, as Aug-23 made a new 8 month high, next resistance the Nov high of 68.52.  Meal was $3 – $4 lower.  Export sales were solid at 33 mil. bu. with new crop totaling 28 mil.  Old crop commitments are down 11% from YA, vs. the USDA forecast of down 8%.  New crop commitments have reached 181 mil. bu. still down 65% from YA and the lowest since 2019.  US soybeans are still priced above SA supplies thru Oct-23.  Meal sales were 408k tons were above expectations with 66% being old crop.  Old crop commitments are up 6% from YA, vs. the USDA forecast of up 3.5%.  After holding their 22/23 export forecast steady last month at 14k tons I’d expect an increase in the Aug-23 WASDE report.  The US soybean area in drought fell 7% last week to 50%, the lowest in 6 weeks.  ABIOVE forecasts Brazilian soybean production at 156.5 mmt, just above the USDA forecast of 156 mmt.  They raised their export forecast .5 mmt to 97.5 mmt, vs. USDA est. of 94 mmt.  Their crush est. of 53.5 mmt, is in line with the USDA’s 53 mmt.  The US Ag. attache in Buenos Aires est. Argentina’s 2022/23 soybean production at 21.25 mmt, more in line with local est. and well below the official USDA forecast of 25 mmt. 

Business Continuity

CORN

Prices closed $.05 – $.08 lower.  Much above normal temperatures are still expected to expand across much of the Southern plains and western corn belt by early next week, extending into the early days of August.  Today’s longer range 11-15 models however are starting to suggest some relaxation of the high pressure ridge allowing temperatures to cooler to more normal readings while increasing prospects for some much needed moisture.  In fact today’s 30 day weather outlook from the NWS shows normal to below normal temps and normal to above normal precip. for much of the nation’s midsection in Aug-23.   It was an inside trading day for Dec-23 corn with the overnight strength being capped by yesterday’s high.  Today’s low briefly penetrated support at its 100 day MA of $5.43 ½ before recovering into the close.  Export sales were in line with expectations.  Old crop commitments at 1.565 bil. bu. are down 34% from YA, in line with the USDA forecast.  New crop commitments have reached 178 mil. bu. down 39% from YA and the lowest since 2019.  US corn remains above offers from SA thru Oct-23.  US corn areas in drought fell 9% last week to 55%, the lowest in 6 weeks.  The area in severe drought fell 11% to 21%.  Several days with high temps in the mid to upper 90’s vs. 105+ next week will likely make a big difference in yield determination.  IKAR forecasts Russia’s 2023 corn production at 15.4 mmt, below the USDA forecast of 16.3 mmt.  

WHEAT

Prices were mostly higher with the exception of Chicago which closed mixed.  Dec-23 Chicago traded to a new high for the move before pulling back to close near unchanged.  Next resistance is last month’s high at $7.84 ¼.  Dec-23 KC traded to an 8 month high overnight, stopping just shy of $9.00 before pulling back.  Dec-23 MGEX also traded to an 8 month high before trading back to near unchanged.  Tensions in the Black Sea remain elevated as Russia attacked Ukraine’s port infrastructure for a 3rd consecutive night while also warning that any vessel traveling thru the Black Sea will be treated as hostile as they may be carrying weapons to Ukraine.  Russia’s ambassador to the UN walked back a bit today stating they wouldn’t target civilian ships in the Black Sea.  Export sales were weak at only 6 mil. bu.  YTD commitments are down 32% vs. the USDA forecast of down 6.5%.  Agritel analysts raised Ukraine’s 2023 wheat production to 18.9 mmt, compated to the USDA est. of 17.5 mmt.  IKAR raised their 2023 Russia production forecast .5 mmt to 86.5 mmt vs. the USDA est. of 85 mmt.  Egypt estimated they have purchased 3.8 mmt of domestic wheat adding they have 5 months of supplies on hand.  US spring wheat areas in drought increased 6% to 31%, the highest since Mch-23.  Winter wheat areas in drought slipped 2% to 50%.  India’s government today announced a ban on the export of non-basmati rice effective immediately.  In the past 3 years India’s rice exports have average 22.5 mmt, 40% of the global trade.  With roughly 80% of their rice non-basmati, this only adds to the global food insecurity.  The move is aimed at trying to reduce domestic rice prices which have increased 3% in the past month, and 12% in the past year.            

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