Feed grains set up to trade in narrow range | Weekly Commodity Market Update
This week Will and Ben breakdown how a narrow ceiling and floor might be set for feed grains.
Market recap (changes on week as of Monday's close):
» September 2024 corn down $.26 at $4.07
» December 2024 corn down $.31 at $4.20
» September 2024 soybeans down $.23 at $11.07
» November 2024 soybeans down $.19 at $11.11
» September soybean oil up 2.13 cents at 45.98 cents/lb
» September soybean meal down $14.60 at $334.80/short ton
» September 2024 wheat up $.19 at $5.90
» September WTI Crude Oil up $1.45 at $82.39/barrel
Weekly highlights:
US energy stocks were mixed on the week. US crude oil and gasoline supplied were up 151 and 111 million gallons, respectively, while distillate fuels and ethanol stocks were down slightly at 16 and 8 million gallons respectively.
US ethanol production pulled back to 307 million gallons on the week from 311 the week prior but nearly matches the same volume during the week the last three years. Ethanol margins remain supportive of elevated production.
The PCE index showed no increases in May for the first time in six months suggesting inflation is beginning to wane. Year over year PCE for May fell from 2.7% to 2.6%.
Managed money traders were net sellers of Chicago corn, soybeans and wheat increasing the net shorts in all three commodities. For corn this was the largest net short in late June on record. Traders were buyers of ICE cotton and Chicago rice.
Except for grain sorghum, grain stocks as of June 1 were up year over year for corn, soybeans and wheat. June 1 grain stocks also came in above the average pre-report trade estimates across the board signaling lower feed use last quarter or lower 2023 production.
USDA’s June acreage report showed corn acres of 91.475 million acres above all pre-report trade estimates and 1.4 million acres higher than the March planting intentions report. Soybean acreage of 86.100 million acres was below last March intentions when traders were anticipating an increase creating some bullish pressure. US winter wheat acreage of 33.805 million acres was lower than the average estimate when traders were anticipating an increase but were pulled down by the bearish corn number.
Weekly US grain and oilseed export sales were mixed. Soybean sales of 10.4 million bushels were below all pre-report estimates and all wheat sales of 24.5 million bushels were above all pre-report estimates. Corn sales of 21.3 million bushels were on the lower end of expectations.
US grains and oilseed export inspections for last week were neutral to slightly bearish. Corn at 32.8, soybeans at 11.1, grain sorghum at 2.2, and wheats at 11.4 million bushels were all within pre-report trade expectations. However, all were below their recent volumes.
US corn and soybean conditions deteriorated week over week more than expected, US corn at 67% good to excellent was down from 69% last week and one point lower than expectations. Conditions fell the hardest in Iowa 73% vs 77%, Minnesota 62% vs 65% and Wisconsin 61% vs 65%. The eastern corn belt saw some conditions improvements after beneficial rains. Corn conditions were 51% this time last year. The conditions index fell from 374 to 370 on the week and compares to 340 last year and 361 on average.
Soybean conditions remained at 67% compared to expectations of a 1% decline. Similar to corn, soybean conditions increased in the eastern corn belt after recent rains. The conditions index moved one tick higher to 369 vs 368 last week. The index was 337 last year and 356 on average.
US cotton conditions decreased sharply to 50% vs 56% last week. Conditions fell in most deep south states and Texas. The conditions index of 331 compares to 327 this week last year and 324 the last three years.
The fast winter wheat harvest is now 54% harvested matching trade expectations. The conditions scores continue to support strong yields across the Midwest.
Topics:
» Market recap
» Recap of last week's USDA reports
» Western Cornbelt post-flooding conditions
» Energy market providing support
» Funds build net short positions
» Reports to watch
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