TFM Morning Update 07-05-2024

CORN

On Wednesday, corn closed lower as pressure has continued following last Friday’s bearish stocks and acreage report. The 4th of July holiday was rainy across the Midwest which will be of some benefit but also added to flooding issues in the northwest.
US ethanol stocks rose by 0.7% to 23.594m bbl according to the US Department of Energy’s weekly petroleum report, and analysts were expecting 23.348m bbl. Plant production was at 1.064m barrels per day compared to average trade guesses of 1.034m.
Chinese corn imports are expected to lag behind the USDA’s estimates at only 20 mmt for the 24/25 marketing year that begins in October. This is 3 mmt below the USDA’s official guess.

Soybeans closed higher on Wednesday and have been moving slightly higher since Friday’s report which saw a reduction in expected planted bean acres. Improving crush margins have also been supportive.
Soybean crush demand has been a bright spot for the soybean market this year with the slow export pace. The USDA reported in the most recent Census crush report that 192 mb of beans were crushed in the month of May, up 3.5% from last year, with soybean oil stocks down 8.4% from a year ago.
The low soybean oil stocks suggest strong soybean oil demand for biodiesel/renewable diesel production. Dec Board crush margins have risen back over a 120 cents/bu, largely on the strength of soybean oil.

Wheat closed lower on Wednesday and is on track for a lower weekly close, but French milling wheat was higher by 1% overnight which could provide support to US markets this morning when the market opens at 8:30 am.
There is market talk of a smaller French wheat crop with quality issues, but this may be balanced by better crop prospects for Eastern Europe.
After some scares that the Russian wheat crop was significantly reduced by dryness and frost, SovEcon increased its estimates back higher to 84.1 mmt from 80.7 mmt on Wednesday citing higher early yields. Russian FOB wheat prices remain the most competitive.

Amanda Brill