Market Commentary July 5, 2024

Rogator At Sunset

Markets are called mixed to lower to start this morning, with the weather outlook generally viewed as non-threatening and limited new fundamental developments.

Managed funds on Wednesday were estimated as net sellers of 1k corn to push the net short out to 312k, net buyers of 4k beans to reduce the net short to 124k, and net sellers of 2k wheat to push the net short to 67k.

Weekly EIA data showed ethanol production up 21k bpd to 1,064k bbls. Stocks were up by 171k bbls to 23,594k bbls.

A French grain industry group said their wheat yields would be 11% below their 10-year average as excessively wet weather last fall and again in the spring hurt the crop.

French wheat ratings dropped to 58% g/e, down from 60% a week ago as harvest is just getting underway.

The Buenos Aires Grain Exchange estimated the Argentine bean crop at 50.5mmt (USDA 50).

Brazil’s environmental agency announced a lawsuit against Syngenta for causing “environmental damage” by producing and selling pesticides using much higher concentrations of a carcinogen that allowed under law.

The UN’s food price index in June was steady from the prior month, but was down 2.5% from the prior year.

Dec. corn finished with small losses on Wednesday in a quiet trade. The downtrend remains in place, with the consolidation trade early this week easing the oversold condition. Support is now 4.15 and resistance 4.30.

Aug. beans posted a higher high, higher low, and the highest close since 6/24 with the August settled right at the 20 DMA, which has been strong resistance the last two trading days. The market has corrected the oversold condition, but there is room to trade higher before it will be overbought. Support for August is 11.50 and resistance 11.80.

Corn has seen a consolidative trade the last few days with prices stabilizing after the big drop post-stocks and acres report. The trend is still lower, but a lot of bearishness has been priced in and managed funds are back to holding a near-record net short. There may not be a catalyst to spark a major rally from here as weather is benign, but downside risk from here is likely limited until there is more confidence that a big crop is on the way.

Beans saw nice gains on Wednesday as old crop cash market tightness drove gains. Managed funds are sitting on a large net short, acres came in low on the report last week, and not much is known about the U.S. bean crop. As long as cash bids hold together, a bigger bounce from this price area is possible. Be patient with sales.

Opening calls are mixed to lower for corn and beans