Posted on October, 2, 2024 at 10:50 am
Wheat and soybean meal markets took off Tuesday. Wheat got a boost from a strong Paris milling wheat market and the ongoing dryness in Russian wheat areas. October soymeal rallied for the third consecutive day to the highest level since mid-June. Corn and soy markets were firmer for much of the day with December corn finding little chart resistance above $4.23. Soybeans and bean oil, after rallying midsession set back late.
WHEAT:
Wheat futures jumped to solid gains, with Chicago December having again touched and risen above $6.00 to the highest level since July 11. Paris milling wheat futures also rose sharply, buoyed by the ongoing and worsening drought in southern Russia and eastern Ukraine. Also, Russian FOB values finally reacted, popping higher to $222/mt compared to $217/mt a few days ago. In the U.S., winter wheat planting has advanced and will advance quickly with a mostly warm and dry weather outlook past the first week in October. Wheat planting has reached 39% done, with Nebraska, Colorado, and Washington leading at near or above 70% planted. While wheat stocks were a bit higher than the trade expected on the September USDA report, all wheat production fell 13 mb from trade expectations, with the lion’s share of that being in winter wheat. The only tender of significance Tuesday was a Jordan tender for 120,000 mt and Thailand is seeking 180,000 mt of feed wheat. The wheat rally comes despite the newly launched strike by the International Longshoremen’s Association (ILA) which if it lasts very long cannot be positive for U.S. agriculture. Funds have pretty much liquidated their net short in wheat. DTN’s National HRW Index closed at $5.25 and 59 under the December contract.
CORN:
December corn futures rose again for the second day following Monday’s bullish September stocks report. Ending stocks for 2023-24 were revealed to be 1.761 billion bushels (bb), some 93 million bushels (mb) lower than trade expectations. Higher feed and residual use in the June through August quarter led to the bullish surprise. That makes it four of the last five years that the September stocks report has led to a bullish surprise. The strength Tuesday came despite what appears to be two weeks of warm and dry conditions in much of the Corn Belt and the longshoremen’s strike which began at midnight Monday and threatens to disrupt exports and imports to and from the U.S. Also weighing on corn should be the better chance of rain for dry areas of both northern Brazil and Argentina by next week. However, through Oct. 7 the forecast remains hot and dry in an area of Brazil where soil moisture levels are said to be the worst in 30 years. Corn demand remains stout with sales and inspections running well over a year ago. On Tuesday a new sale of 195,000 metric tons (mt) or 7.7 mb was announced sold to unknown destinations for 2024-25. Export inspections last week of 44.9 mb sent the yearly exports to 131 mb, 25 mb higher than a year ago. The USDA reported corn harvest is now 21% complete and ahead of the 5-year average. The forecast ahead for all but the Southeast U.S., reeling from Hurricane Helene’s catastrophic results, should ensure a speedy harvest. Funds on Tuesday are likely covering much of their once-large net-short position. December corn rose for the fourth straight day and is getting overbought technically. I would expect some hedging by the close. DTN’s National Corn Index was priced at $3.93, 32 cents below the December futures.
Source: Northern AG