Written Commentary
CORN
Prices were $.03-$.04 higher today with spreads slightly firmer. Dec-24 reached a fresh 3 month high with next resistance at $4.40 ¾, the 50% retracement from the Aug. low and the May high. US weather remains favorable for harvest with above normal temperatures and little precipitation expected into mid-October. Corn usage for ethanol in August reached 473 mil. bu., while down 11 mil. from July (July was revised up by just over 10 mil. bu.) it was well above the 442 mil. used in Aug-2023. Total usage for the 23/24 MY reached 5.471 bil. 6 mil. bu. above the current USDA forecast of 5.465 bil. Last week’s ethanol production rebounded to 1,015 tbd, up from 994 tbd the previous week and up less than 1% from YA. There was 102 mil. bu. of corn used, or 14.6 mil. bu. per day below the 14.9 mbd needed to reach the USDA forecast of 5.450 bil. Implied gasoline usage last week plunged 7.4% to 8.521 mbd, however was still up 6.3% from YA. Ethanol stocks were steady at 23.5 mil. barrels. Algeria is seeking up to 320k mt of SA feed corn for Oct/Nov shipment in a tender that expires tomorrow.
SOYBEANS
Prices were mixed today with beans steady to $.01 lower, meal was down $4-$8, while oil was up 55-80. Bean and meal spreads weakened while oil spreads firmed. Nov-24 beans appear stuck between resistance at its 100 day MA at $10.75 ½ and support at the 50 day MA at $10.12 ¼. Dec-24 oil is back above its 100 day MA with resistance at LW’s high of 44.86. US spot board crush margins slid $.09 today to $1.76 with bean oil PV rebounding to 39%. The price plunge in Dec-24 meal held right at its 100 MA support. Meal was likely pressured by reports the EU is considering delaying regulation requiring companies that sell agricultural goods to prove their supply chains do not contribute to the destruction of forests. This deforestation law that was planned to begin Dec. 30th and will likely be delayed 1 year. There are better prospects for rain across dry areas of Brazil and Argentina next week. Rains to favor Argentina the early half of the week and Central areas of Brazil the 2nd half of the week. The US crushed nearly 168 mil. bu. of soybean in Aug-24, down 13% from July and just below the 169 mil. bu. from Aug-23. Crush was in line with expectations and brought cumulative crush for the 23/24 MY to 2.288 bil. bu., 7 mil. below the current USDA est. Soybean oil stocks at 1.629 bil. lbs. was also in line with expectations below the 2.009 bil. lbs. from July and 1.772 bil. lbs. from Aug-23
WHEAT
Prices were sharply higher today with Chicago and MGEX up $.14-$.18 while KC was $.20 higher. All 3 classes broke out to a fresh 3-4 month high. Next objective for Dec-24 Chicago is $6.39 ½, the 50% retracement from the May high to the August low. Dec-24 KC is above its 100 day MA for the 1st time since mid-June while reaching a 38% retracement level at $6.21 ½. Russia’s weather bureau cites that a lack of rainfall in recent months has some wheat producing areas in worse than usual conditions. Russia’s grain export union is calling for curbs to grain exports after Q1 shipments for the 2024/25 MY are likely to reach 17 mmt, the majority of that volume being wheat. SovEcon cut their 24/25 Russian wheat export forecast .5 mmt to 47.6 mmt, vs. the USDA forecast of 48 mmt. It’s also being reported Egypt’s GASC has agreed to purchase 500k mt of wheat per month from Nov-24 thru April-25 from Black Sea origins, most likely Russia. Total imports over the 6 month period to reach just over 3.1 mmt. Analysts in Australia have been lowering their wheat production forecasts due to dry conditions and frost. Estimates range from 27-30 mmt, well below the USDA Sept-24 forecast of 32 mmt. Lower global production should continue to benefit US demand and support prices.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
