TFM Morning Update 07-15-2024

CORN

The corn market is trading lower this morning with carryover weakness from soybeans and wheat, giving up the gains from Friday’s bullish USDA WASDE report that put old crop ending stocks well below trade estimates.
In Friday’s WASDE report, the USDA surprised the market by lowering old crop ending stocks for the 23/24 crop year to 1.877 billion bushels from June’s estimate of 2.022 bb. The unexpected decrease was due to an increase in export demand and higher feed and residual use.
The lower 23/24 ending stocks numbers carried over to the 24/25 new crop ending stocks, which came in at 2.097 bb, well below the 2.312 bb that was expected. 24/25 corn production was increased as expected with no change to yield with the additional acres from the June 28 Acreage report.
The USDA made a minor adjustment to Argentina’s corn production estimate, lowering it by 1 mmt to 52 mmt from last month’s estimate. Meanwhile, the projection for Brazil remained unchanged at 122 mmt, which is higher than Conab’s latest estimate of 115.86 mmt.
Friday the Commodity Futures Trading Commission (CFTC) released its Commitment of Traders report, showing that as of Tuesday, July 9 managed funds increased their net short position by 17,445 contracts. This brought their total net short position to a record 353,983 contracts.

Soybeans are trading lower this morning following a relatively neutral WASDE report on Friday. Additional weakness this morning may be coming from lower meal prices and sharply lower soybean oil.
Friday’s WASDE report was favorable for corn but neutral for soybeans. Old crop ending stocks came in at 345 million bushels, 5 mb below last month and towards the lower end of expectations. US production for 24/25 was slightly lowered from last month’s estimate to 4.435 bb, and slightly below trade expectations. Yields remained unchanged at 52.0 bpa, while new crop ending stocks were pegged at 435 mb, relatively in line with expectations.
The USDA’s report left Brazilian soybean production unchanged at 153 mmt, significantly higher than CONAB’s estimate of 147.34 mmt. Though it did slightly lower its estimate for Argentina’s soybean crop to 49.5 mmt, down from last month’s 50 mmt.
Friday the Commodity Futures Trading Commission (CFTC) released its Commitment of Traders report, showing that as of Tuesday, July 9 managed funds increased their net short soybean position by 31,679 contracts. This brought their total net short soybean position to 172,605 contracts.
This morning’s price action could be a knee jerk reaction to the assassination attempt on former President Trump, as many believe the odds of his re-election have greatly increased, potentially bringing with it more strained trade relations with the world’s largest soybean importer, China.

The wheat complex is trading lower this morning across all three classes, with Chicago leading the way, as it follows through on Friday’s bearish USDA data.
The USDA increased wheat production to a bearish 2.008 billion bushels, up from 1.875 in June and the highest in eight years. Old crop carryout was increased from 688 mb to 702 mb, while the 24/25 ending stocks went from 758 mb to 856 mb.
Global 23/24 wheat carryout increased from 259.6 mmt to 261.0 mmt, and the 24/25 season went from 252.3 mmt on the June report to 257.2 mmt.
Friday the Commodity Futures Trading Commission (CFTC) released its Commitment of Traders report, showing that as of Tuesday, July 9 managed funds reduced their net short Chicago wheat position by 4,837 contracts. This brought their total net short position to 69,137 contracts.

Scott Masters