TFM Daily Market Summary 07-18-2024

CORN HIGHLIGHTS:

  • Disappointing export sales and general talk of a larger corn yield helped pressure the corn market as prices are testing support under the market. Going into Friday’s trade, Dec corn is down 9 ¾ cents on the week.
  • USDA released weekly export sales on Thursday morning. Last week, U.S. exporters reported new sales of 438,000 MT (17.2 mb) for old crop and 486,000 MT (19.1 mb) for new. Old crop sales were below expectations, while export sale for new crop slightly exceeded expectations. The soft old crop sales pressured the front end of the corn market on Thursday.
  • With the friendly overall weather, strong crop ratings, talk in the marketplace is corn yield could be raised going into harvest. Some analyst groups are looking at a potential 183-184 bushels/acres yield, one analyst group posted an extreme number of 189 bushels/acre. Even with reduced harvested acres, a yield jump will add bushels to the potential corn stockpile.
  • A bright spot in corn demand is ethanol production. Weekly production remains strong and with the recent rise in oil prices, margins remain friendly. With that combination, ethanol producers have room to bid up for corn in the cash market, stockpiling for future ethanol production.
  • Weather concerns other than extremes are likely past the point of impacting the corn crop nationally. Going into the end of the month, the forecast remains very favorable for corn production.

SOYBEAN HIGHLIGHTS:

  • Solid export sales across the soybean complex, and flash sales reported for new crop beans helped soybeans close with modest gains near the top end of its range. Soybean oil also settled higher and toward the upper end of its range, while meal closed lower with most of the weakness in the nearby contracts.
  • The August/November spread may have reached a point of exhaustion, after reaching a fresh high of 61 cents, bear spreading took over and pushed the differential back to 55 ½, down ¾ of a cent from yesterday’s close.
  • The USDA released its weekly export sales report earlier today, showing 27 million bushels in new soybean sales as of July 11. The total was split between 13.2 mb for the 23/24 marketing year and 13.8 mb for the new crop 24/25 marketing year. Export shipments last week totaling 7.4 mb fell below the 14.8 mb pace needed per week to reach the USDA export goal of 1.700 bb.
  • The USDA reported flash sales showing private exporters sold 510,000 mt (18.7 mb) of soybeans and 150,000 mt of soybean meal to unknown destinations for the 24/25 marketing year. With rumors circulating that China was in the market to buy US beans off the PNW, the possibility remains that this soybean sale could be for them, though there is no way to know without confirmation.
  • Analyst APK-Inform lowered its 2024 Ukrainian sunflower seed and soybean crop estimates due to the hot and dry weather. The agency dropped sunflower seed production 1% to 14.5 mmt, and soybean production by 2% to 5.9 mmt. Ukraine is a leading exporter of sunflower seed products which compete with soybean meal and oil.

WHEAT HIGHLIGHTS:

  • Wheat closed mixed amongst the three classes today. The US Dollar Index saw a sharp recovery, which offered resistance to commodities. Additionally, Paris milling wheat futures closed neutral to slightly lower and have yet to fill the chart gap above the market. Winter wheat harvest is headed towards completion, so perhaps the market is trying to carve out harvest lows.
  • The USDA reported an increase of 21.3 mb of wheat export sales for 24/25. Shipments last week at 23.2 mb exceeded the 16.2 mb pace needed per wheat to reach the export goal of 825 mb. Sales commitments are also above the estimated pace, now totaling 284 mb, which is up 49% year on year.
  • Chinese customs data indicated that they imported 1.2 mmt of wheat in June, a 44% increase year on year. So far, year to date imports at 9.3 mmt are up 16% from last year.
  • According to Interfax, Grain Gates, a Russian grain trader increased their exports by 80% during the 23/24 season to 14.1 mmt. Reportedly they boosted the number of countries they export to. Top destinations include north African countries, Turkey, and Indonesia. Grain Gates was said to be one of the biggest Russian exporters during the first half of the 23/24 season.
  • With much improved soil moisture and growing conditions, Argentina’s wheat crop is expected to increase to 18.2 mmt for the 24/25 season due to higher yields. That would be up 14.9% from the previous year and may also be influenced by a larger planted area, expected to expand 5% year on year to 6.2 million hectares.
  • According to a study published in the journal Nature Genetics, Chinese scientists have found a gene that should improve wheat yields in salty soils. Using this knowledge of the salt tolerance gene could result in a yield boost of 5-9%. This may be important for Chinese grown wheat, as many of their primary production areas have high saline soils.

DAIRY HIGHLIGHTS:

  • Spot cheese closed up a half-cent today to close at $1.88875/lb, seeing 15 loads traded between the two products for the second day in a row.
  • Spot whey gained a penny to move back to $0.51/lb, where it finished last Friday, but is still testing the February high and in solid shape.
  • Class III futures outdid their spot markets today with double-digit gains in the nearby contracts. August closed up 40 cents at $20.17.
  • Class IV futures were either unchanged or lost 1 to 8 cents in Thursday’s action. Those markets have been quiet for a time.
  • Spot butter lost 2.50 cents on 21 loads traded, closing at $3.1050/lb and down a half-cent on the week. Powder is testing resistance again at $1.19/lb.

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Author

John Heinberg

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