TFM Midday Update 7-01-2024

CORN

Friday’s USDA estimate of planted corn acreage came in at 91.5 million, above both the average trade guess and the higher end of estimates. While this is bearish, the number of harvested acres may be what is important down the road, especially given the flood damage in the northwestern Midwest.
The USDA is estimating Brazilian corn production at 122.0 mmt, still well above both CONAB and the International Grains Council which range from 114.1 to 115.4 mmt on their estimates.
CFTC data on Friday indicated that managed funds, as of June 25, increased their net short position in corn from 209,334 to 296,251 contracts. This continues to add weight to the shoulders of the corn market.
Argentina’s corn harvest is said to be 55% done. And due to the leafhopper plague, they experienced this season, some analysts are looking for a crop that is 4-6 mmt below the USDA estimate of 53 mmt.

On Monday, September soybeans on China’s Dalian exchange were up a little bit, around the equivalent of $14.60 per bushel. With US soybeans currently so cheap, there may be more purchases made by China, despite the fact that they usually source from Brazil at this time of year.
Soybean harvest in Argentina is just about finished, which may offer some pressure to the soybean meal market. The August contract and beyond continue to be in a big picture downtrend.
According to Friday’s CFTC data, managed funds as of June 25 increased their net short position in soybeans from 74,0302 to 111,179 contracts. Like corn, this is pressuring the soybean market.
Palm oil is up for the fourth session in a row, and crude oil is higher today as well. Both of these are giving a boost to soybean oil futures this morning.

Although it is early in the season, US wheat export sales are up 45% compared to last year. This may provide some bullish support to the wheat market.
Despite a decline in planted wheat acreage on Friday’s report, harvested acres were up by about 800,000. This is somewhat bearish and may limit upside potential for wheat.
Winter wheat harvest may see some delays this week due to more rain across the central US and potential severe weather. Additionally, the southwestern US plains could see temperatures over 100 degrees this week.
Sov Econ reportedly decreased their projection of Russian wheat exports for the 24/25 season by 1.7 mmt to 46.1 mmt. For reference the USDA is using a figure of 48 mmt.

Brandon Doherty