Written Commentary
SOYBEANS
The soybean complex was sharply mixed with beans up $.06 – $.12, meal $9 – $11 higher, while oil was down 60 – 80. Near term resistance for Nov-23 beans is at $13.81, with support at $13.32 ½. Next resistance is at $14 followed by the July high of $14.35. Next resistance for Oct-23 meal is at $420. An inside trading day for Oct-23 oil with prices consolidating near the midpoint for the month. Day 3 of the Pro Farmer crop tour went thru IL and Western IA yesterday, the 2 largest producing states. Pod counts in Illinois came in at 1,271 on average per 3×3’ square, just above YA and the 3 year Ave. In Iowa there were 3 groups taking different routes along the western part of the state. Pod counts on 1 of the routes came in above YA and the 3 year Ave., while on 2 routes pod counts were below YA and their 3 year Ave. After years of resisting the planting of genetically modified corn and soybean crops, this year China expanded GMO acreage for study in a pilot program. Yesterday China’s Farm Ministry stated the results were “outstanding and the application of the technology was completely safe.” They went on to state these new methods must be seized and they should not be optional. Historically Chinese corn and soybean yields have run 40-45% below that of the US. It will be interested to see how this plays out, and if there are any long term policy changes in regard to GMO technology. US soybean exports at 58 mil. bu. (13 mil. – 2022/23, 45 – 23/24) were above expectations. New crop commitments have reached 434 mil., still down 46% from YA, vs. the USDA forecast of down 8%. While the soybean crop could still benefit from late season rain, the longer it takes to materialize the lesser the benefit. With the recent hot/dry conditions the crop will be racing towards an early maturity.
CORN
Prices were steady to $.04 lower, rebounding in sympathy with the soybean market. Support for Dec-23 is at $4.74, with resistance at $5.06. Temperatures have begun to cool off across the northern plains. By Sunday the extreme heat will be limited to the deep south along the gulf coast. Still very little precipitation is forecast for key growing areas into early September. The best prospects for rain are in the far eastern corn belt along with central MO, northern KS and southern NE. Changes to this week’s drought monitor were minimal. Pro Farmer corn yields in IL were pegged at 194 bpa, slightly above YA and the 3 year Ave., however below the current USDA est. of 201 bpa. In Iowa there were 3 groups taking different routes along the western part of the state. 2 of the groups found corn yield slightly above YA and 3 year Ave., while 1 was just below. A final yield est. for IA will be released this evening. There were net cancellations of 1 mil. bu. old crop corn exports, while new crop sales at 27 mil. were in line with expectations. New crop commitments have reached 289 mil. bu., still down 18% from YA, vs. the USDA forecast of up 26%. The BAGE forecasts Argentine 2023/24 corn acres at 7.3 mil. HA, up 3% from YA, while also above the USDA est. of 7 mil. HA. They cautioned however that lingering drought conditions may push plantings back toward Oct. from their usually starting time in Sept. The European Commission lowered their EU corn production forecast by 1.3 mmt to 61.7 mmt. Earlier this month the USDA lowered their forecast 3.7 mmt to 59.7 mmt. I feel less confident in my $4.50 – $4.60 downside price target for Dec-23 corn, largely due to mounting production losses in soybeans.
WHEAT
Prices tailed off late closing lower across all 3 classes. KC was down $.01 – $.02, while Chicago and MGEX were both $.04 – $.09 lower. Near term range for Dec-23 Chicago at $6.12 – $6.46 remains intact. Same with Dec-23 KC at $7.39 – $7.70, and $7.88 – $8.20 for MGEX Dec-23. Export sales at 15 mil. bu. were in line with expectations. YTD commitments have reached 264 mil. bu., down 22% from YA, vs. the USDA forecast of down 8%. Ukraine’s Ag. Ministry states their wheat harvest is complete with production reaching 22 mmt, just above the USDA forecast of 21 mmt. The European Commission lowered their EU wheat production forecast ever so slightly to 126.1 mmt. Earlier this month the USDA lowered their forecast 3.0 mmt to 137 mmt. The EU Commission also lowered their ending stocks forecast 1.1 mmt to 16.3 mmt.
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