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Ag Market View for June 7.24

CORN

Prices were $.02-$.03 lower, closing roughly at the midpoint of today’s range.  Didn’t seem like, but corn actually closed higher for the week.  Spreads weakened with today being Day 1 of the Goldman roll.  Prices were pressured today by a strong US $$$ and a less threatening forecast.  July-24 made a new high for the week overnight before collapsing back below the 50/100 day MA near $4.52.  Support for Dec-24 corn is at $4.58 ¼.  The BAGE kept their Argentine production forecast unchanged 46.5 mmt vs. the USDA forecast of 53 mmt.  The trade doesn’t anticipate much change in US endings stocks or new crop production in next Wed. WASDE report.  Worlds stocks are expected to slip due to lower production for SA, however I expect no change to Brazil’s 122 mmt forecast. Until a more threatening forecast develops it appears rallies will be hard to hold despite expectations for lower production in other exporting countries.  Look for a fairly sizeable increase in MM short position with today’s CFTC-COT report.    

SOYBEANS

The soybean complex was lower today as bean spreads weakened while product spreads held steady.  Beans were down $.09-$.21, meal was $2 lower, while oil was down 70-75.  July-24 beans rejected trade above $12 and the 50/100 MA while slipping to new lows for the week.   Next support is April low of $11.45 ¾.  Inside day for July-24 oil with resistance at the 50 day MA at 45.47 and support at 43.  The low in July-24 meal at $354.70 matched this week’s low as prices consolidate near the 50 day MA.  Longer range weather models have backed down on expectations of much above normal temperatures for the Midwest by mid-June.  Week 1 of the outlook looks for normal to slightly below normal temperatures for the Midwest with better moisture for the drought plagued Southern plains.  Week 2 shows temperatures warming to slightly above normal readings.  Rainfall over the next 10 days likely to be below normal, however with much the nation’s midsection well-watered it will not be stressful for row crops.  Today’s announced sale of 104k mt of beans to China did little to excite the trade.  According to Chinese customs their soybean imports in May-24 at 10.22 mmt were below expectations and 15% below their record imports of 12 mmt in May-23.  YTD imports at 37.37 mmt are down 5.4% YOY.  The BAGE kept their Argentine production forecast unchanged 50.5 mmt vs. the USDA forecast of 50 mmt.  Harvest advanced 6% to 92%.  The trade isn’t expected any changes to this year’s production in next Wed. USDA report.  Old crop ending stocks are expected to tick up 10 mil. bu. due to lower demand.  The higher old crop stocks are expected to carry thru to slightly higher new crop. 

WHEAT

Prices were down $.11-$.13 across all 3 classes today.  July-24 Chicago violated support at its 50 day MA at $6.24 ½ before recovering.  Same with KC July-24 violating support at $6.60 before bouncing.  July-24 MGEX dropped to a 6 week low before stabilizing just above the 100 day MA.  Tunisia reportedly bought 50k mt of wheat at an average price of $267.70/mt CF for July shipment.  Turkey’s Ag. ministry announced they will ban wheat imports from June 21st thru at least Oct. 15th in order to support local prices.  Their supplies will likely swell to over 25 mmt with this year’s harvest, the highest in over 20 years.  Turkey would typically import 2 – 2.5 mmt of wheat from Black Sea regions over this timeframe.  Despite declaring a state of emergency across 10 regions because of crop damage from frosts last month Russia states they will be able to honor their export commitments.  Russia also announced they were shipping a 31k mt cargo of wheat to Brazil for the first time.  US WW harvest may experience some delays due to scattered showers this weekend.  Better than expected yields have weighed on prices this week. 

Charts provided by QST.

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