TFM Midday Update 07-05-2024

CORN

The USDA reported an increase of 14.1 mb of corn export sales for 23/24 and an increase of 12.3 mb for 24/25. Shipments last week at 35.2 mb fell below the 37.1 mb pace needed per week to reach the USDA’s export goal of 2.150 bb.
Parts of the eastern Corn Belt received rain yesterday with more anticipated to fall into the beginning of next week. Temperatures are also expected to be about average over the next week or so. This may offer some resistance to the corn market.
Parts of the northern and western Midwest also received rain yesterday and many of these areas are already too wet. Reportedly, five of these states have flood advisories, including southern Illinois.
The Buenos Aires Grain Exchange reported that Argentina’s corn crop is 63% harvested, which is near the average pace. Although, according to the International Grains Council, US corn FOB values are still a little bit cheaper versus both Argentina and Brazil.

The USDA reported an increase of 8.4 mb of soybean export sales for 23/24 and an increase of 5.5 mb for 24/25. Shipments last week at 11.2 mb fell below the 13.9 mb pace needed per week to reach the USDA’s export goal of 1.700 bb.
Both soybean oil and meal are trading higher at midday, offering a boost to soybean futures. August oil in particular has made another near term high and is trading at the highest level in about three months. According to the US Energy Department, 1.070 million pounds of soybean oil were used to produce biofuel in the month of April.
There continue to be rumors of a trade war between Indonesia and China. Reportedly, Indonesia will impose a 200% tariff that could lead to China looking at other sources for their vegetable oil imports. Along with declines to the rapeseed and sunflower seed crops in the EU and Black Sea, this could mean that China will import more US soybean oil.

The USDA reported an increase of 29.6 mb of wheat export sales for 24/25. Shipments last week at 11.3 mb fell below the 15.6 mb pace needed per week to reach the USDA’s export goal of 800 mb.
US wheat is rebounding at midday, with double-digit gains so far across all three US futures classes. Support is coming from Paris milling wheat futures which are also trading higher, and the US Dollar Index which is down this morning. Additionally, the US Dollar Index has broken through support this morning at the 40 and 50-day moving averages, which may indicate more downside (this would be bullish for wheat).
On a bearish note, Russian wheat export FOB values are said to have fallen to $221 to $225 per mt. And with Sov Econ recently increasing their estimate of the Russian wheat crop from 80.7 to 84.1 mmt on better than expected yields, this could keep a lid on rising wheat futures prices.

Brandon Doherty