TFM Midday Update 8-28-2024

CORN

This morning the USDA reported private export sales totaling 100,000 mt of corn for delivery to Columbia during the 24/25 marketing year, and 165,735 mt of corn for delivery to Mexico also during the 24/25 marketing year.
US corn futures are at a significant discount when compared with corn futures on China’s Dalian exchange. The equivalent of a $4.70 per bushel difference is the largest in nearly a year, which may eventually lead to China importing more US corn.
Today’s ethanol report from the EIA showed that production fell to 1.071 million barrels per day from 1.098 last week. However, this is still up 6.3% from last year and above the pace necessary to reach the USDA’s estimated corn usage of 5.450 billion bushels. Additionally, stocks were steady at 23.6 million barrels, which compares to 21.6 million a year ago.
Mississippi River water levels have been on the decline, which has caused barge rates to increase. Reportedly, St. Louis barge freight has a 725% tariff, versus a tariff of 330% earlier this month.

The USDA reported private export sales totaling 264,000 mt of soybeans for delivery to China during the 24/25 marketing year.
Rain fell overnight in parts of Illinois, Iowa, and Indiana. This should help to finish the crop and keep yield prospects high in those areas.
Both soybean oil and meal are trading lower at the time of writing, offering weakness to soybean futures. The bean oil in particular may be reacting to the lower crude market, as concerns over Middle East production have somewhat subsided.
India is said to be considering an increase on vegetable oil import taxes. This may also be pressuring US soybean oil futures because India is the top global importer of vegetable oils.

After posting a bullish key reversal on yesterday’s close, Chicago wheat futures are trading higher again today. Daily stochastics also show a buy crossover signal in oversold territory. Both of these technical indicators suggest that a low may have been reached.
Paris milling wheat futures are trading higher for the second session in a row. However, at the time of writing it appears that the front month September contract could be running into some resistance around the 10-day moving average. September has not traded above this level in about two and a half weeks.
Offering a boost to wheat this morning is data from Stats Canada. Their 2024 all wheat production figure came in at 34.4 mmt, compared to an average pre-report estimate of 35.1 mmt. Of that total, the majority of production is from spring wheat at 25.4 mmt, which was roughly in line with last year’s production.
Russian cash wheat values are reported to have fallen by $1 per metric ton and are now around $216 to $218 per mt. Russia has been aggressively selling wheat despite declines to their crop production, which has been keeping pressure on global wheat markets.

Brandon Doherty