TFM Midday Update 06-21-2024

CORN

The USDA reported an increase of 20.1 mb of corn export sales for 23/24 and an increase of 3.7 mb for 24/25. Shipments last week at 58.3 mb surpassed the 39.6 mb pace needed per week to reach the export goal of 2.150 bb.
On a positive note, US ethanol production bounced back to 1.059 million barrels per day, which is above the weekly pace needed to meet the USDA’s projection of ethanol grind.
Next week Friday, traders will receive both the Quarterly Stocks and Acreage reports. With June 1 corn stocks expected to be higher than a year ago, this suggests that farmers may sell any rallies, keeping pressure on futures prices.
Expectations for the Crop Progress report this upcoming Monday are for slight declines to crop ratings. However, the most recent corn rating at 72% good to excellent is historically high for this time of year. Therefore, it may require a big drop in condition to help offset the recent bearish trend.

The USDA reported an increase of 20.4 mb of soybean export sales for 23/24 and an increase of 3.1 mb for 24/25. Shipments last week at 12.5 mb fell under the 13.7 mb pace needed per week to reach the export goal of 1.700 bb.
There continues to be a lack of new crop US soybean sales, with China having taken zero so far. Brazil soybeans are also said to be cheaper to China (compared to US), which does not bode well for the US export market at this time. Soybean basis levels in China are reported to have fallen over the past couple of weeks, and the Brazilian Real’s value has fallen to the lowest level in several months, making Brazil’s exports less expensive.
Palm oil is sharply lower on Friday, which may pressure soybean oil. However, at the time of writing, US bean oil is trading around neutral and off session lows.
Funds are still long the soybean meal market. Given that fact, there is some concern about downside if we see less demand for US meal as South American exports start to kick in.
According to NOAA, a hot and dry weather pattern is expected to extend into July for parts of the eastern Midwest, which may provide longer term support to the market.

The USDA reported an increase of 21.7 mb of wheat export sales for 24/25 and a decrease of 0.4 mb for 25/26. Shipments last week at 13.4 mb fell under the 15.5 mb pace needed per week to reach the export goal of 800 mb.
So far the wheat crops in Australia, Canada, Brazil, and Argentina are all looking better than they did at this time last year. The same can be said for the US hard red spring crop. All of this may offer resistance to global prices.
Since the end of May, Paris milling wheat futures have lost approximately 45 euros per ton – this is equivalent to about $1.20 per bushel. At the time of writing that market is mixed but is attempting to find support at some key moving averages. A rebound would certainly offer support to the US market.
Approximately 60% of China’s winter wheat production area is reported to be experiencing extreme heat and dryness, which may provide some support to the market.

Brandon Doherty