TFM Midday Update 8-5-2024

CORN

Corn is trading slightly higher at midday and has come back significantly from the lows earlier this morning which saw December futures below 4 dollars. The stock market is trading significantly lower, and it is possible that some money from equities is flowing into grains.
Friday’s CFTC report showed that as of July 30, funds bought back 23,453 contracts of corn which reduced their net short position to 295,096 contracts. This is the third week in a row that they have bought contracts back, even though prices have moved lower.
US corn is now the cheapest on the global market and both export demand and domestic demand are running ahead of expectations. Unfortunately, this improved demand has not translated into higher prices.

Soybeans are trading higher at midday after reversing from the earlier morning lows, despite lower prices in both soybean meal and oil. Prices were down much more sharply this morning after the Japanese Nikkei fell by over 12% yesterday which was the biggest single day drop on record.
Weather forecasts are mixed with Illinois and Iowa having turned slightly drier over the next 7 days, but temperatures are expected to be cooler which should offset the lack of rain. The northwestern Plains continue to receive too much rain.
Similar to corn, the recent decline in soybean prices have made them much more competitive globally and we have seen export demand pick up. On Friday, China purchased 202,000 mt of soybeans which followed another sale on Thursday.
Friday’s CFTC report showed that as of July 30, funds were sellers of 14,932 contracts of soybeans which increased their net short position to 178,591 contracts.

Wheat began the day sharply lower across the board but has recovered and prices are now mixed. The US Dollar is sharply lower today which makes wheat more attractive for export.
In the Black Sea region, heat, dryness, and in some areas, frost, is damaging the crop and could lead to lower production. The EU is expecting lower production as well, and between the two, anywhere from 20 to 24 mmt of wheat could be lost.
Friday’s CFTC report showed funds selling 2,432 contracts of Chicago wheat which increased their net short position to 77,616 contracts. In KC wheat, they bought back 674 contracts which brings their net short position to 40,192 contracts.

Amanda Brill