Written Commentary
CORN
Prices were $.04 lower settling near session lows. Dec-24 corn ending a streak of 4 consecutive higher closes settling below yesterday’s low. Yesterday’s high was roughly $.50 above the late August low and overdue a correction. Next resistance above the market is at $4.40 ¾, the 50% retracement from the Aug. low and the May high. The US East and Gulf coast port workers strike has reached day 3 with so far minimal impact on agricultural commodities. US weather remains favorable for harvest activities with above normal temperatures and little precipitation expected into mid-October. Exports at 66 mil. bu. were above expectations and a MY high bringing YTD commitments to 647 mil. bu. up 14% from YA, vs. the USDA forecast of up less than 1%. Current commitments represent 28% of the USDA forecast, below the historical average of 33%. Noted buyers last week were Mexico – 21 mil., Columbia – 13 mil. and Japan – 10 mil. US corn acres in drought increased another 2% LW to 27%, still well below the 59% from YA. Prospects for US export demand remain strong with lower production in Europe and lower acres expected in Argentina.
SOYBEANS
Prices were mixed today with beans $.09-$.10 lower, meal was down $8-$9, while oil was 80-90 higher. Bean and oil spreads weakened while meal spreads were slightly firmer. Nov-24 soybeans remain stuck between resistance at its 100 day MA at $10.73 ¾ and support at the 50 day MA at $10.12 ¼. Dec-24 oil briefly traded above its Sept-24 high of 44.86 before pulling back. Dec-24 meal is building support at its 100 MA at $332. Spot board crush margins were little changed at $1.77 ¾, however bean oil PV shot back above 40%. Meal prices have been driven lower by the EU decision to push back deforestation regulations 1 year. These regulations took aim at bean and meal imports from Brazil, and a lesser extent Argentina, as it required commodity firms to prove their products were not produced on cropland that was cleared of forests after 2020. When or if these regulations are ever implemented would likely give US meal a competitive advantage in the global marketplace. There are better prospects for rain across dry areas of SA next week. Rains to favor Argentina the early half of the week and Central areas of Brazil the 2nd half of the week. While the exact timing of rains for Central Brazil seem to shift around a bit, the prevailing theme is it will commence by mid-October. US bean exports at 53 mil. bu. were in line with expectations and bring 2024/25 commitments to 696 mil. up 3% from YA vs. the USDA forecast of up 9%. China/unknown combined to buy 31 mil. bu. bringing their commitments to 470 mil. bu. below 516 mil. from YA and well below the 790 mil. bu. from 2022. Meal sales at 188k tons were at the low end of expectations. Old crop commitments are up 7% from YA, vs. the USDA forecast of up 10%. Bean oil sales at 31k tons were in line with expectations. Old crop commitments are up 113% from YA vs. the USDA forecast of up 72%. US soybean area in drought fell 4% LW to 26%, well below the 58% from YA.
WHEAT
Prices finished lower across all 3 classes with Chicago down $.09-$.12, KC was $.05-$.08 lower while MGEX was down $.02-$.03. Nearby spreads in Chicago reached new lows. Dec-24 contracts rest right at or just below their respective 100 day MA’s across all 3 classes. US wheat exports at 16 mil. bu. were above expectations and bring YTD commitments to 427 mil. up 23% from YA, vs. the USDA forecast of up 17%. YTD by class commitments are: HRW +62% vs. USDA +79%, SRW -9% vs. -30%, HRS +13% vs. +8.5% and white +49% vs. +25%. A day after reportedly agreeing to purchase 3.1 mmt of Black Sea origin wheat in direct Govt. negotiations, Egypt announced plans to alter their flour mix to cut back on wheat consumption. By using corn flour (or sorghum) in a 1 to 4 ratio with wheat flour would reportedly lower their wheat usage by 1 mmt annually. US winter wheat area in drought fell 6% LW to 44% while spring wheat area in drought rose 4% to 22%.
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