Grain Market Summary 7.12.24

July 12, 2024

GENERAL COMMENTS:

September corn closed up 1 3/4 cents and December corn was up 4 cents. August soybeans closed down 12 cents and November soybeans were down 2 1/2 cents. September KC wheat closed down 16 cents, September Chicago wheat was down 20 1/2 cents and September Minneapolis wheat was down 21 1/4 cents.

The U.S. Dollar Index is down 0.32 at 104.12. The Dow Jones Industrial Average is up 438.88 points at 40,192.63. August gold is down $1.90 at $2,420.0, September silver is down $0.52 at $31.15 and September copper is up $0.0825. August crude oil is down $0.41 at $82.21, August ultra-low sulfur diesel is down $0.0095, August RBOB gasoline is down $0.0042 and August natural gas is up $0.061.

For the week:

September corn closed down 8 1/2 cents and December corn was down 9 1/4 cents. August soybeans closed down 61 1/4 cents and November soybeans were down 64 1/2 cents. September KC wheat closed down 31 1/4 cents, September Chicago wheat was down 39 3/4 cents and September Minneapolis wheat was down 35 3/4 cents.

WHEAT:

September KC Wheat closed down 16 cents at $5.67 3/4 Friday and was down 31 1/4 cents on the week, staying near its lowest prices in 2024. USDA increased its estimate of U.S. ending wheat stocks in 2024-25 from 758 mb to 856 mb, much more than expected and the highest in five years. New production estimates from NASS pegged total U.S. production at 2.008 bb, the largest U.S. crop in 8 years and up 133 mb from last month's estimate of 1.875 bb. Production estimates were higher than expected for every wheat class, except soft red winter.

USDA's estimate of world ending wheat stocks increased from 252.27 mmt to 257.24 mmt (9.45 bb), still the lowest in 9 years. Production estimates for Russia and Ukraine were unchanged and the larger U.S. crop explained most of the world's change. Canada's estimate was increased 1 mmt to 35.0 mmt, while a slight increase in Argentina was offset by a slight decrease in Europe.

Winter wheat harvest continues to make progress in the U.S. with help from a mostly dry forecast, but western temperatures will be especially hot this weekend, hard on the folks doing the harvesting. In western Europe, harvesting has been held up by wet conditions that are expected to turn drier later next week. The market has shown no sign of concern about Europe's rain lately and September milling wheat in France ended down 1.7% Friday, near its lowest price in over two months.

After a harsh selloff in June and now, a higher production estimate in the U.S., the price trends remain down for the September contracts of all three U.S. wheats. DTN's National HRW Index closed at $5.39 Thursday, up from its lowest close in two months. DTN's National HRS Index closed at $5.69, up from the lowest close in over three years.

CORN:

December corn closed up 4 cents at $4.14 3/4, but was down 9 1/4 cents on the week, ending near its lowest December close in over three and a half years. Even before USDA estimated 91.5 million planted acres of corn and 4.99 billion bushels (bb) of corn stocks on June 1, corn prices were struggling to find support, but Friday's WASDE report offered surprising relief, contradicting the June 28 corn stocks report with stronger-than-expected demand estimates. USDA reduced its estimate of old-crop U.S. ending corn stocks for 2024-25 from 2.022 bb to 1.877 bb, thanks to 75 million bushel (mb) increases in feed demand and export demand. USDA's new-crop estimate of ending stocks was slightly lowered from 2.102 bb to 2.097 bb, also lower-than-expected with help from lower beginning stocks, a 75-mb increase in feed demand and a 25-mb increase in export demand. Offsetting part of the bullish adjustments, USDA now estimates a 15.100 bb corn crop, holding on to a record yield estimate of 181 bushels per acre.

USDA's estimate of world ending corn stocks was increased slightly to 311.64 million metric tons (mmt), just a little above 309.13 mmt or 12.17 bb the previous year. USDA also reduced its estimate of corn production in Argentina from 53 mmt to 52 mmt, while keeping the estimate for Brazil unchanged at 122.0 mmt. Given what looks like a much-needed bullish adjustment to USDA's June 28 corn stocks report and Friday's outside bullish reversal, it will be interesting to see if specs come under pressure to cover some short positions next week. With funds net short a record amount of corn, the trend remains down in December corn, for now. DTN's National Corn Index was priced at $3.92 Thursday evening, 9 cents below the September futures.

SOYBEANS:

November soybeans ended down 2 1/2 cents at $10.65 1/4 Friday, finishing the week down 64 1/2 cents and at its lowest close in over three and a half years. Using new planting estimates of 86.1 million acres and 85.3 million harvested acres from the June 28 report, USDA now estimates a 4.435 bb soybean crop, based on a record-tying yield of 52.0 bushels per acre. USDA slightly reduced its estimate of U.S. ending soybean stocks in 2024-25 from 455 mb to 435 mb, still the highest in five years.

USDA snapshot estimate of world soybean stocks was also tweaked slightly lower, from 127.90 mmt to 127.76 mmt or 4.69 bb. The only South American production change was for Argentina, adjusted from 50.0 mmt to 49.5 mmt (1.82 bb). Among soy products, USDA's ending stocks estimates for soybean oil were adjusted 50 mb lower for both, old-crop and new-crop seasons, due to a 50-mb increase in net exports. August soybean oil finished the week down 2.90 cents, while August meal was down $18.40. For now, the trend in November soybeans remains down with a lot to learn about the 2024 crop season ahead. DTN's National Soybean Index was priced at $10.76 Thursday evening, 41 cents below the August futures.

Source: DTN, Todd Hultmann DTN Lead Analyst