7.23.24

 

Good afternoon. Ag markets again closed mostly higher on Tuesday for the second consecutive day, as weather premium continues to be injected back into prices. Traders are concerned over a hot/dry forecast for the northwestern Corn Belt into the first part of August, but we would offer reminder that it was just 20 days ago producers here were concerned over flooded fields and too much moisture. Weather premium can come and go very quickly.

 

CU closed at 4.02 1/2 Tuesday, up 2 1/4. CZ was also up 2 1/4 at 4.17 1/4. SQ closed a quarter cent lower at 11.17 1/2. SX was up 6 3/4 at 10.75 1/2. WU finished at 5.42 3/4, down 5 1/4. Products were lower, August bean meal closed at 342.70, down 90 cents/ton, and August bean oil closed at 46.66, down 34 points. August bean oil has made practically the same high for now the third session in a row near 47.30. Livestock markets were higher, August live cattle closed at 186.30, up $2.37, August feeders closed at 258.75, up $2.35, and August hogs closed at 93.65, up $1.27. Feeders had an outside day higher, and August hogs left a gap from 92.475 to 92.70 on this morning's open. Outside markets are mixed, crude oil futures are down $1.10-1.20/bbl, the Dow Jones index is down 30 points, and the US$ index is up 15 points. The S&P500 is unchanged and the NASDAQ is down 60 points. September crude oil traded below its 200-day moving average today for the first time since June 11th.

 

Spreads were mixed Tuesday, corn spreads were unchanged to a half cent higher, and soybean spreads were down 5-7 cents. CU/CZ was unchanged at -14 3/4, and SQ/SX closed at 42, down 7 cents.

 

USDA this morning announced daily sales of 200,000 mt's of corn for delivery to unknown destinations during the 2024/25 marketing year. This comes following yesterday's new crop corn sale to Mexico, while sources are rumoring that unknown is either Japan or again Mexico on today's sale. Why Mexico would buy in a known category one day and an unknown category the next is unknown.

 

Corn and soybean futures were again firm on Tuesday for the second day in a row this week; this is giving farmers and traders added confidence that a short-term low has potentially been scored on the charts. If so, retracement patterns on the August bean contract would show 11.34 as the first upside objective from current levels, with 11.44, 11.65, and 11.87 being further targets on the top end. In the corn market, similar retracement calculations show upside objectives at 4.25 1/2, and then 4.37 and 4.48 for the September contract. The head and shoulders topping pattern that was established from generally mid-March to mid-June almost perfectly predicted the downside objective in Sep corn at 3.85 3/4; the actual low made last week was at 3.89 1/2. Other technical note on the soybean market is that August currently has around 45 cents of premium vs the September, which is important as the August contract nears its first notice day on July 31st. Traders will likely be closely watching the SQ/SU spread once August futures enter the delivery period.

 

Fundamental news has otherwise stagnated a bit as we reach the 'wait and see' period of crop development. Potential for record breaking yields exists at this point, but it will take actual combine confirmation of this before markets resume their summer downtrend. The chatter comparing the current 2024 charts with those of 2014 has again picked up, which warrants reminders that the lows made in 2014 were 3.18 1/4 on December corn, and 9.04 on November soybeans. The bull camp would argue these numbers are not inflation adjusted, but like fundamentals, the charts don't necessarily always care about inflation. One should be aware of the current downside potential that still exists, despite months of falling flat price.

 

Financial market headlines continue to be dominated by politics, and today was no different. Starting with the current US President, Joe Biden announced Tuesday morning that he would giving a live address to the nation Wednesday night at 7pm central time. His administration also announced Tuesday that he has tested negative for Covid-19, and that his symptoms had been resolved. Next, his current Vice President and new Democratic front-runner Kamala Harris received endorsements from both Chuck Schumer and Hakeem Jeffries, all but ensuring her nomination at the DNC in August. And lastly, now former Director of the US Secret Service Kimberly Cheatle resigned this morning amid scrutiny for the botched security effort at the Trump rally in PA.

 

Mid-day weather remains unchanged form the overnight runs, with the main feature being the eastward expansion of the high pressure ridge that currently resides in the western half of the country. The ridge will provide heat and dryness to the western Corn Belt, which is a concern for producers here. Otherwise, models agree that moisture remains confined mostly to the south and southeast through the end of this week. The Midwest will see scattered thunderstorm activity, as moisture flow from the gulf remains active.

 

The international forecast continues to be a mixed bag; the EU model remains wetter than the GFS for Ukraine and the eastern Black Sea, while northern Europe holds in a wetter pattern. Chinese growing areas remain warm and wet. In South America, temps are seen average to slightly above average in both Brazil and Argentina, while moisture is mostly limited to Argentina. Aside from the US ridge, heat/dryness in Russia and Ukraine is the main concern today in the global weather forecast.

 

 


Quotes are delayed, as of July 24, 2024, 04:54:18 AM CDT or prior.

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