TFM Morning Update 07-17-2024

CORN

The corn market is quietly trading towards the top of its tight 4 1/2 cent range in the December corn contract as traders book profits and cover some short positions.
Weekly ethanol production data will be released later today from the EIA. The trade expects production to increase from last week to 1.065 million barrels per day, with stocks also expected to increase to 23.712 million barrels from 23.603 million last week.
Ukraine’s 2024 corn yield could drop by as much as 30-35% due to the extreme heat and drought conditions the region has faced recently. This from the Ukrainian Agrarian Council.
In yesterday’s trade, managed funds were buyers of an estimated 5,000 contracts of corn. This brings their estimated net short position down to 370,000 contracts.

So far this morning, the soybean market is trading moderately higher at the top its range with the August contract leading. Bull spreading is being supported by a tight cash market.
Reports indicate that China has purchased up to 75 cargoes, or approximately 4.5 million metric tons, of Brazilian soybeans—mostly for August delivery—since the beginning of July, as soybean prices have dropped to multi-year lows. This buying activity has also likely lent support to the front end of the soybean futures market.
The recent buying activity by China from Brazil highlights the thin book of sales that the US currently has for the new crop. This situation has been exacerbated by the drop in Brazil’s currency versus the US dollar, making Brazilian supplies cheaper on the world market.
Managed funds were quiet buyers of an estimated 3,000 soybean futures contracts in yesterday’s trading session, which brings their estimated net-short position to 180,000 contracts.

The wheat complex is trading higher and near session highs across all three classes as the market attempts to rebound from oversold conditions.
Russia continues to dominate the world wheat market with low export prices, currently near $218 per metric ton FOB. For comparison, US HRW FOB export prices are near $260 per mt.
According to Russia’s Ag Ministry, Russia has reportedly increased their export duties on wheat by 4.7% for the period of July 17-23.
Managed funds were rather quiet yesterday, as their trading activity was net even for the session, leaving their net short position in Chicago wheat unchanged at an estimated 85,000 contracts.

Scott Masters