TFM Midday Update 7-19-2024

CORN

Global equity markets are on the defensive this morning, which may be tied to a global tech outage that has affected banks, airlines, government operations, and more. However, this does not appear to be weighing on the grain complex, as corn, soybeans, and wheat are all in positive territory.
Basis levels for corn (and soybeans) in Brazil are said to be well above where they were at this time a year ago. In theory, this should help US exports.
Both the 6-10 and 8-14 day weather forecasts show above normal precipitation for much of the eastern corn belt. This should keep yield prospects high and may continue to limit upside movement for corn futures.
The Black Sea area remains hot and dry along with parts of eastern Europe. This may curb corn yields and lend support to US futures.

In a flash sale today, the USDA reported private exporters sold 105,000 mt of soybean meal to unknown destinations for the 24/25 marketing year.
US soybean export values for September are said to now be below that of Brazil, which may stimulate buying interest. Rumors that China is looking to purchase US soybeans are increasing.
Soybean oil is higher this morning and is receiving support from a higher palm oil market. Additionally, canola and rapeseed prices are increasing due to drought in eastern Europe. Soybean meal is also trading higher and is, along with soybean oil, offering a boost to soybean futures.
US new crop soybean sales, at 28 million bushels, remain well below last year’s pace of 69 million bushels, indicating that the US has some catching up to do. Over the past year, Brazil has reportedly fulfilled 70% of Chinese soybean purchases.

Wheat is the upside leader in the grain complex at midday, with double digit gains in all three classes. Support is coming from sharply higher Matif wheat futures, which have now filled the chart gap left on Monday.
The forecast for the US northern plains states looks warmer and drier, which is raising some concern about the spring wheat crop and is helping Minneapolis futures to rally this morning.
The French wheat crop condition declined by 5% last week to 52% good to excellent. Additionally, 14% of the crop is now harvested. For reference, their crop was rated 80% good to excellent at this time last year.
Russian wheat export values yesterday are reportedly as low as $217 to $218 per mt FOB. As they continue to be the global export leader, it may limit upside movement of futures.

Brandon Doherty