Written Commentary
CORN
Prices were $.08-$.09 lower today. July-24 held support above its Feb. low at $4.22 ¼. Dec-24 traded to its lowest level since Sept-21. A long line of storms has moved from north to south providing relief to the central and ECB this morning, in particular IL, IN and OH, states that witnessed the largest decline in ratings this past week. Although US crop ratings fell 3% to 69% G/E, overall composite ratings remain the highest since 2020. In the past decade however overall ratings are about at the middle of the pack. Biggest declines last week were in OH down 13% and IN down 8%. 4% of the crop is silking, just ahead of YA and 5-year Ave. of 3%. The USDA announced the sale of nearly 210k mt of corn (8 mil. bu.) to Mexico, the vast majority of this corn for 2024/25 MY. Money managers were net buyers of nearly 21k contracts of corn last week, reducing their short position to 191k contracts. In all likelihood since last Tues. (reporting date for CFTC data) this short position has jumped to back over 220k. Tomorrow’s EIA report is expected to show ethanol production between 1,056-1,077 bbd, above last week’s 1,040 tbd pace in response to the recent uptick in processing margins.
SOYBEANS
The soybean complex was lower across the board with beans down $.12-$.19, meal was $4-$8 lower, while oil was down 70-100. Similar to corn spot July-24 has held support above its recent low of $11.55, however Nov-24 has dropped to its lowest level since Aug-21. Inside trade for spot meal with support at its 50 day MA of $362.60. July oil broke out to the downside trading to a 3 year low. Spot board crush margins slipped $.12 to $1.11 bu. No more than scattered lite rains are expected for SE SD, SW MN and NW IA, thru the end of the week which will hopefully allow flood waters to rescind and river levels to drop. Temperatures across the Midwest are expected to moderate this week with extreme heat limited to the southern plains. Extended US forecasts continue to lean to above normal temperatures and above normal precipitation. Soybean ratings dropped 3% to 67% G/E in line with expectations while planting progress at 97% was also in line with expectations. 8% of the crop is blooming matching YA pace and ahead of the 5-year Ave. of 6%. Overall ratings are still the highest since 2020. Ratings fell in 14 states, improved in 3 and held steady in 1. Biggest drop in ratings was NC down 27%, IN down 10% and OH down 9%. Last week MM’s were net sellers of 30k contracts of soybeans, 9k bean oil, while buying just over 6k meal. The MM short position in oil has grown to nearly 85k contracts, the largest since Sept-2018.
WHEAT
Prices continued their freefall finishing $.06-$.11 lower across all 3 classes. July-24 Chicago held above its March low at $5.37 ¾. July-24 KC managed to hold above yesterday’s low. New contract lows for spot MGEX with prices below $6 for the first time in over 3 years. Winter wheat conditions improved 3% to 52% G/E, better than expectations of holding steady. Overall rating are the highest since 2019. Composite ratings improved in 9 states, slipped in 3, while holding steady in 6. Current ratings suggest an average WW yield of 52.5 bpa, vs. the USDA est. of 51.4. Crop ratings in Kansas have jumped to their highest level since mid-April just as harvest has pushed past 50%. US harvest advanced to 40%, in line with expectations and well above the 21% from YA and 5-year Ave. of 25%. Spring ratings slumped 5% last week to 71% G/E, vs. expectations for only a 1% drop. Composite ratings are still the highest since 2019. 18% of the crop is headed matching the 5-year Ave. and below YA at 25%. Egypt’s GASC bought 470k mt of wheat in their recent tender. Prices ranged from $227-$230/mt FOB with Russian being the cheapest. Breakdown was 180k from both Russia and Romania, 60k from Ukraine and 50k from Bulgaria. Shipment is for late July thru early Aug-24.
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