Written Commentary
CORN
Prices were $.04-$.05 lower today making session lows on the close. Spreads were steady to lower. Dec-24 closed below its 100 day MA, however held support at its 50 day MA at $4.10. Sharply lower energy prices overnight set the stage for weaker trade across the agricultural space to start the week. Israel’s targeted attacks this weekend weren’t aimed at Iran’s energy infrastructure resulting in spot crude oil futures gapping lower overnight. The USDA announced the sales of 124k mt (4.9 mil. bu.) of corn to Japan and 120k mt (4.7 mil. bu.) to an unknown buyer. Export inspections at 32.4 mil. bu. were at the low end of expectations. YTD inspections have reached 261 mil. bu. up 33% from YA, vs. the current USDA forecast of up 1.4%. Last week money managers bought 15.5k contracts of corn, reducing their short position to 71,499 contracts. Index funds were net sellers of nearly 15k contracts. AgRural reports first crop corn plantings in Brazil advanced 11% LW to 52%. The USDA Ag. Attache in Argentina is forecasting their 24/25 corn production at 48 mmt, below the official USDA forecast of 51 mmt. They also expect their exports will reach 35 mmt, also just below the USDA est. of 36 mmt. MARS, a EU crop consulting group, lowered their 2024 corn yield estimate to 6.66 mt/HA, down from 6.85 mt/HA last month.
SOYBEANS
Prices were lower across the complex today led by bean oil prices that plunged 125-150. Beans were down $.10-$.14 making session lows at the close while meal was $1-$2 lower. Soybean and bean oil spreads weakened while meal spreads were slightly higher. Support for Jan-25 beans is at the Oct-24 low of $9.80 ¾ with resistance at the 50 day MA, currently $10.24. Dec-24 meal fell to a fresh 2 month low with next support not until its contract low at $298.50. Dec-24 bean oil traded below its 100 day MA intraday, however recovered to close slightly above it. Next support is the October low at 41.36. Spot board crush margins slipped $.04 ½ to $1.66 ¼ bu. while bean oil PV fell back to 41.2%. Weather forecasts in SA remain supportive for planting progress and early crop development. In central Brazil a good mix of rain and sunshine over the next week to 10 days will keep production prospects high. Southern Brazil will see net drying this week, favorable for wheat harvest and summer plantings. Rain prospects in the south improve in week two of the outlook. Much of the Central Midwest was dry this weekend enabling US harvest to hit the home stretch. By midweek the first of 2 healthy rain events will move across the nation’s midsection, delaying the last bit of harvest however will start bringing drought relief following weeks of net drying. Soybean inspections at 88 mil. bu. were in line with expectations. YTD inspections at 382 mil. are up 2% from YA, vs. the USDA forecast of up 9%. Last week MM’s sold just over 19K contracts of soybeans extending their short position to 59,574 contracts. MM’s were net buyers of nearly 14k contracts of bean oil extending their long position to 40,649 contracts, the largest in just over 1 year. AgRural reports Brazilian soybean plantings advanced 18% to 36% complete, still slightly below the historical average.
WHEAT
Prices were $.09-$.11 lower across all three classes today, also making session lows near the close. The Dec-24 contracts in all 3 classes traded to their lowest levels since the first trading day in September. Export inspections at 9 mil. bu. were at the low end of expectations and a new MY low. YTD inspections at 349 mil. bu. are still up 33.5% from YA, vs. the USDA forecast of up 17%. Last week MM’s were net sellers of 5k MGEX, nearly 3k in Chicago while being net buyers of 841 contracts in KC. The USDA Ag. Attache in Argentina is forecasting 24/25 wheat production at 18 mmt, matching the official USDA forecast, however their export forecast at 12 mmt is just above the USDA’s 11.5 mmt est. IKAR is reporting wheat prices for export from Russia ended last week at $232/mt FOB, down $2 from the previous week and well below the $240/mt floor price suggested by the Ag. Ministry and major exporting unions earlier this month. SovEcon reports Russia exported 1.02 mmt of grain last week, nearly all of which was wheat at 1.0 mmt. This was little changed from the previous week when they exported 1.09 mmt of grain and also 1.0 mmt of wheat.
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