Written Commentary
CORN
Prices were down $.08-$.09 today making new lows into the close. Dec-24 traded to a new low for the month however held support above its 50 day MA at $4.07 ½. Despite the weakness spreads firmed to their best levels in 2 ½ months. Weaker energy prices, an improved weather outlook in SA along with uncertainty over Russian wheat export pricing all weighed on the agricultural space. Except for some spotty showers in the Great Lakes region this weekend, much of the nation’s midsection was dry enabling corn and soybean harvest to move along quickly. Conditions are expected to remain dry for much of this week before needed rains develop in the Southern plains by next weekend. Last week Money managers bought 44k contracts cutting their short corn position to 23,729 contracts, the smallest since Aug-23. The index funds also bought just over 22k contracts extending their long position to 310.5k, the largest in 5 months. This marks the 8th consecutive week’s index funds have been net buyers of corn. By raising their production forecast on Friday the USDA increased production in Aug, Sept and Oct. Since 1990 this has happened 6 times, 4 times their final production forecast was above the October est. with 2 times production falling from the Oct. estimate.
SOYBEANS
Prices were mixed with beans down $.13-$.15, meal was steady to $1 higher while oil was down 130-140. Nov-24 beans dipped below $10.00 for the first time in a month, however held above the Sept-24 low at $9.95 ¼. Dec-24 meal held above its September low at $310.60 before recovering. Dec-24 oil is back below its 100 day MA and the $.42 level. Next support is the 50 day MA at 41.13. Spot board crush margins slipped $.11 ½ today to $1.58 ½ with bean oil PV falling back below 40%. Rain opportunities for Brazil and Argentina are expected to increase over the next week to 10 days improving soil moisture for crop planting, emergence and establishment. Last week MM’s bought 13k contracts of beans, 16.7k contracts of oil while selling 6.6k contracts of meal. MM’s cut their short bean position to 22k contracts, the smallest since May-24. MM’s are now long 96.6k contracts of meal and 32.5k contracts of oil. The USDA increased soybean production in August, only to lower their forecast in Sept and Oct. Since 1990 they have done this only 3 times, with their final production forecast being below the October est. all 3 years by an average of 80 mil. bu. AgRural estimated Brazilian plantings at 8.2%, up from 4.5% LW however below the 17% pace from YA and the slowest pace to plantings in 4 years. NOPA crush is out tomorrow at 11 AM CST. NOPA members are expected to have processed 170.3 mil. bu. in Sept-24, well above the 158 mil. in Aug-24 and just above the 165.5 mil. in Sept-23. Oil stocks are expected to have slipped to 1.1 bil. lbs. at the end of Sept-24 vs. 1.138 bil. in Aug.
WHEAT
Prices are down $.14-$.17 across all classes today. Dec-24 Chicago barely held support above LW’s low at $5.84. Both Dec-24 in KC and MGEX have violated support at LW’s low. Markets shrugged off news that another Russian missile attack over the weekend damaged 2 civilian vessels and a grain storage facility in Ukraine’s southern Odessa region. The attack killed 1 person while injuring dozens more. Heavy rains fell in Central Ukraine over the weekend, with much lighter amounts in drought areas in the east along with Southern Russia. Last week MM’s bought 9.4k contracts of KC wheat, 6.1k of MGEX while selling 6.5k in Chicago. Their combined short position across all 3 classes is down to 43k contracts, the smallest in 4 months. SovEcon reports Russia exported 1.1 mmt of grain LW with 1.0 mmt being wheat. These are both above the previous week’s sales of 870k tons of grain and 800k of that being wheat. IKAR reports Russia’s export price for wheat ended last week to $230/mt FOB, while up from $223/mt the previous week, this is well below the $250/mt price floor the Ag. Ministry asked exporter not sell below in international tenders.
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