TFM Midday Update 9-4-2024

CORN

The corn market is currently trading toward the upper end of its tight 4 ¼ cent range at midday as it continues to recover from overnight lows as traders likely continue to cover short positions on an improved technical picture, with additional support coming from soybeans and wheat.
The USDA released its weekly crop progress report yesterday afternoon, which showed the corn crops good to excellent ratings remained steady at 65%, versus 53% last year. The report also showed that 90% of the crop is in the dough stage, 60% dented, and 19% is mature.
The USDA reported that 473.5 million bushels of corn were used to produce ethanol in the month of July, 4% more than last year.
There is market talk that there is a push in India to produce more corn-based ethanol and shift away from sugar cane. The move could make India a net corn importer by nearly 1 million metric tons, versus exporting 2 – 4 mmt. Imports could potentially come from Myanmar and Ukraine, with the US and South America potentially filling export holes left behind by India.

Soybeans continues to recover from overnight lows on an inside day, with the day’s current trading range within yesterday’s high and low. Support is coming from soybean meal and oil, which are currently trading higher.
Yesterday’s Crop Progress report showed soybean good to excellent conditions dropped 2% to 65% as of Sunday September 1, versus 53% last year. The report also showed that 94% of the crop is blooming and 13% is dropping leaves.
Census crush data was released by the USDA yesterday afternoon and showed July crush at a record 193.4 mb for the month, and well above trade expectations of 192.1 mb. Total crush for the 23/24 marketing year has reached 2.12 billion bushels, 92.6% of the USDA’s current estimate. Soybean oil stocks came in the lowest for any July on record at 2.01 billion pounds, though above trade expectations of 1.97 bp.
Estimates from a Bloomberg survey show that Malaysian palm oil reserves rose 7.5% and hit a six-month high in the month of August, due to slowing exports. This news adds to the negativity felt in the market from news of China opening an anti-dumping probe against Canada for supposedly dumping cheap canola into China, which drove Canadian canola prices sharply lower and weighed on soybean oil.

The wheat complex is currently on track for its sixth consecutive day higher across all three wheat classes, with December Chicago and KC contracts trading above the 50-day moving average for the first time since early June, as funds likely continue to cover short positions.
Yesterday’s USDA crop progress report showed that the spring wheat harvest has advanced to 70% complete as of Sunday September 1, from 51% the week prior, and compares to 70% harvested on average at this time. Additionally, 2% of the winter wheat crop is planted, in line with the five-year average.
SovEcon reports that Russia’s export prices have held steady this week, landing between $217 and $220 per metric ton. Although Russian wheat remains the cheapest on the world export market, the country’s export totals for August were 5.2 mmt, down slightly from last August’s 5.3 mmt.

Scott Masters