Written Commentary
Ag Market View for September 06.24
September 6, 2024
CORN
Deja vu all over again in corn as prices closed modestly higher, unable to hold early session strength after again posting fresh 2 week highs. Next resistance for Sept-24 is the July high at $4.13 ¾. Dec-24 resistance is at $4.26 ½. The past 24 hours saw heavy rains along the Gulf coast and SE along with decent amounts in NE IA, southern WI and Northern IL. While speculative traders are believed to have bought nearly 8k contracts yesterday, open interest increased nearly 10k contracts, perhaps suggesting some additional end user buying as well. Ethanol production slipped to 1,095 tbd last week, down from 1,106 tbd LW and steady with YA. Production was the 3rd highest of the MY and above expectations. Corn usage at 109.7 mil. bu., or 15.7 mil. bu. per day, was above the 15.2 mbd needed to reach the USDA forecast of 5.450 bil. bu. Ethanol stocks jumped to 23.7 mil. barrels, at the high end of expectations and above 23.2 mb from YA. Implied gasoline demand surged 7.7% last week to 9.456 mbd, the highest in 8 months and up 6% YOY. Ukraine’s 24/25 grain exports thru July 24th at 2.78 mmt are up 67% from YA. Corn exports account for 1.39 mmt of the total. US export sales tomorrow are expected to range from 15 – 50 mil. bu.
SOYBEANS
The soybean complex finished weak with the more favorable midday forecast. Beans closed near session lows down $.06-$.12 with Aug-24 gaining slightly on new crop. Meal managed to hold $1-$2 higher while oil was down 65-100. Near term resistance for Aug-24 beans is at yesterday’s high at $11.29 with support at $11.00. Resistance for Aug-24 meal is at its 100 day MA at $350. Aug-24 oil is consolidating near its 100 day MA at 46.08. Midday forecasts added precipitation for the central and eastern corn belt as the position of the high pressure ridge is a bit further west. The last week of July will feature much above to much normal temperatures with limited prospects of rain for the US plains, Canadian prairies, and WCB. Above normal temperatures are expected to hold across the nation’s midsection thru the first week of Aug. with rainfall below normal in the west, normal to above in the east. Spot board crush margins slipped $.01 ½ to $1.51 ½ bu. while bean oil PV slipped to 40.1% a 3 week low. India’s edible oil imports in July are expected to reach 1.92 mmt, up 26% from June. Palm oil imports are seen at 1.45 mmt, with bean oil imports at 400k mt, both up 45% MOM. Sunflower imports at 380k mt would be down 18%. Indonesia is testing the use of 40% biodiesel blends, vs. the current 35%. If the higher mandate is adopted biodiesel consumption would rise 3 mil. kiloliters in 2025 to 16 mil. Export sales tomorrow are expected to range from 22 – 48 mil. bu. old and new crop combined, 300 – 800k mt of meal, and 0-20k mt of oil.
WHEAT
Prices were closed little changed on the day in choppy in 2 sided trade across all 3 classes. Chicago was $.02-$.04 higher led by Sept-24, KC was steady to $.01 higher, while MGEX was down $.03-$.05 pressured by results from day 2 of the spring wheat crop tour which seem to support the record USDA yield forecast. Sept-24 Chicago is stopped short of resistance at LW’s high at $5.56 ¼. Yesterday’s Day 1 of the Spring wheat crop tour thru southern and EC North Dakota revealed the highest yield potential in the 30 year of the tour’s existence at 52.5 bpa. This compares to 48.1 bpa YA and 5-year Ave. of 42.2. Final results are expected on Thursday. The USDA est. ND yields at 54 bpa in their July production report, already up 8% from the previous record yield of 50 bpa in 2022. Ukraine’s 24/25 wheat exports have reached 994k mt. US export sales tomorrow are expected to range from 12 – 22 mil. bu.
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