Ag Market View for July 28.23

SOYBEANS

The soybean complex was mostly lower with beans $.15 – $.45 lower, meal down $9 – $10, while oil was down $.01 in spot Aug-23 while back months were 15 – 35 higher.  The Aug/Nov spread closed at $1.04 down $.30 for the day and down $.55 from midday yesterday.  Likely a combination of farmer selling of old crop inventories to take advantage of the price inverse, end users backing off with bids, or just simply liquidation of Aug-23 positions ahead of FND.  For the week spot board crush margins were up $.22 to $2.58 bu. with meal gaining 1.3% of PV to 57.4%.  The USDA announced the sales of just over 900k tons (33 mil. bu.) of new crop soybeans.  That’s brings the weekly total to 61 mil. bu. Today’s sales were 15 mil. – unknown, 12 mil. – China, and 6 mil. to Mexico.  Safras & Mercado forecast next year’s Brazilian soybean crop at 171.5 mmt, well above the USDA forecast of 163 mmt.          

Trading Candlestick Chart

CORN

Prices were down $.11 – $.12 with Dec-23 closing below several key technical levels.  The BAGE reports corn harvest has reached 68% while leaving their production forecast unchanged at 34 mmt, same at the USDA.  So far the preferential currency program in Argentina has stimulated sales of 1.2 mmt since it began on Monday.  The goal is to reach 4 – 5 mmt of sales thru the program that runs thru the end of Aug.  Disappointing trade action for the bulls in corn with much of the Midwest in drought, expectations for lower crop ratings next week, and not a lot of rain in the forecast, yet prices fell to their lowest levels in nearly 2 weeks.  The old crop USDA export forecast is probably still at least 25 – 50 mil. bu. too high.  While ethanol production has been lively, I don’t think it enough to cause the USDA to reverse course and start raising usage forecasts.  We’ve been documenting for week’s the historically slow start to the new crop export program.  So far lower supplies and/or higher costs for getting Ukrainian crops into the global supply chain has not stimulated US demand with the huge Brazilian crop putting a lid on US rally attempts.    

WHEAT

Prices were $.06 – $.10 lower across all 3 classes today.  The Dec-23 contracts for all 3 slipped to new lows for the week before recovering.  SovEcon raised their Russian production forecast .3 mmt to 87.1 mmt, vs. the USDA forecast of 85 mmt.  The Ukrainian Ag. Ministry est. grain harvest has reached 11 mmt, of which 8 mmt has been wheat.  Russia has declared buyers of Russian grain will need to pay in rouble’s instead of US $$$.  Their Ag. Ministry also claims their wheat exports to African nations in the first half of 2023 has tripled to 9 mmt.  HRW wheat harvest is hitting the final stretch while conditions in the Northern plains continue to deteriorate.  While Russian Pres. Putin continues to pledge support by providing free grain to several African nations, there is also chatter that India may have purchased 1 – 1.5 mmt of Russian wheat.  Potentially significant development as India was expected to be a modest wheat exporter. 

See more market commentary here.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2024 ADM Investor Services International Limited.

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.