Market Recap:
Corn and soybean futures were again higher on Thursday, as concerns over the 10-day weather forecast have continued to be at the forefront of traders’ attention this week. Day-to-day price direction in the short term is almost exclusively a product of weather, and the current threatening forecast has caused that variable to lean bullish this week. After tomorrow's close, the ensuing 48 hours of forecast updates will be extremely important to how markets trade to begin next week.
Products were mixed, August bean meal closed at 352.40, up $9/ton, and August bean oil closed at 45.81, down 21 points. Cattle markets were higher, August live cattle closed at 188.90, up $2.00, and August feeders were up $1.50 at 258.62. New highs for the move for live cattle, while feeders had an outside day higher. August hogs closed at 93.77, unchanged on the day. Outside markets are mostly mixed, crude oil futures are up 40-60 cents/bbl, the Dow Jones index is up 200 points, and the US$ index is unchanged. The S&P500 is unchanged as well, and the NASDAQ is down 60 points.
Spreads were lower across the board, corn spreads were down a quarter cent to a penny, and soybean spreads were down 9-11 cents. CU/CZ closed at -14 3/4, down a half cent, and SQ/SX closed at 36 1/2, down 10 1/2 cents. Inside day for CU/CZ.
USDA this morning announced daily sales of 264,000 mt's of soybeans for delivery to unknown destinations during the 2024/25 marketing year. This is the first daily soybean sale this week following flash corn sales on Monday and Tuesday.
This morning's weekly export sales report for the week ending July 18th showed old crop corn sales at 331,400 mt's. Featured buyers for the week were Japan (122,400 mt's), Mexico (106,900 mt's), and Korea (81,200 mt's). Unknown destinations canceled/rolled 71,300 mt's. Current sales pace is up 37% from last year. Old crop soybean sales were seen at 88,600 mt's. Featured buyers for the week were the Netherlands (114,500 mt's), and Indonesia (76,300 mt's). Unknown destinations canceled/rolled 188,900 mt's in the week. The current pace is down 14% from last year.
For the 2024/25 crop, wheat sales were seen at 309,300 mt's. Featured buyers for the week were Korea (105,000 mt's), Nigeria (58,800 mt's), and Japan (50,500 mt's). The current pace is up 48% from last year. New crop corn sales were seen at 745,200 mt's, and new crop soybean sales were seen at 829,700 mt's. Both figures were the highest weekly new crop sales totals of the marketing year and were well above trade expectations. Cumulative new crop sales for both corn and soybeans remain well behind recent years, but the recent uptick in business is encouraging.
Other notable data for the ag markets on Thursday was the weekly drought monitor update. The update didn't offer much of anything Earth shattering for the Corn Belt, but did show noted improvement across much of the southeast and East Coast. Almost the entire state of North Carolina saw a 1-class improvement in conditions. Degradations were seen mostly in the northwest. As of Tuesday, just 4% of the nation's corn production was in D1-D4 drought condition, compared to 5% last week. Soybeans are in the same situation, with just 4% of the area in D1-D4 drought; last week also saw a 5% reading.
Stock index futures spent most of the day clawing back a portion of yesterday's losses amid a plethora of data released on Thursday. Most notable was that Q2 GDP in the US came in at a 2.8% annualized rate, which was well above economists’ estimates for a 2.1% reading. The figure was also well above Q1's 1.4% growth rate. Other data that encouraged investor confidence was initial jobless claims that came in below expectations at 235,000. The figure was down 10,000 claims from last week, while economists had predicted a decrease of just 7,000 claims. Continuing claims for the week ending July 13th were down 9,000 to 1.851 mil. Even as today's data was positive, it likely comes down to tomorrow's inflation reading to decide market direction into the weekend.
Thursday's mid-day weather forecast continues to feature a high-pressure ridge progressing east over the next week to 10 days, which will provide warmth and dryness for the central US Plains and western Corn Belt. The exact location of this ridge, as well as continued strong moisture flow coming out of the Gulf of Mexico, is giving the models trouble in pin-pointing precise details. Both the EU and GFS are in good agreement however on moisture continuing to favor the southeastern part of the country and the East Coast over the next week. Whether the ridge progresses further east than what is currently advertised, and the duration of the ridge beyond next week, are the two biggest developments for ag traders and producers into the first part of August.
Global weather continues to show signs of improvement, though the EU and GFS models are not in great agreement; the EU continues to be wetter across almost the whole of Europe, and especially in Ukraine and western Russia. Both models see above average rainfall chances in China's growing regions, while the EU is also wetter than the GFS in western Australia. The one area where the GFS is wetter is South America; it shows average chances at precip across most of Brazil, while the EU model leaves rainfall chances at below average for most of the western part of the country. Argentina sees average to above chances at precip from both models over the next 10 days.
Have a great evening!
Chelsey White
Emery Manager & Originator:: Topflight Grain Cooperative, Inc.
593 Emery Rd :: Maroa, IL 61756
Phone:: 217-794-2240
E-Mail:: cwhite@tfgrain.com
Web:: www.topflightgrain.com
This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any trading strategy, promotional element or quality of service provided by Topflight Grain Cooperative, Inc. Topflight Grain is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable but is not guaranteed as to its accuracy. Contact Topflight Grains designated personnel for specific trading advice to meet your trading preferences. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Topflight Grain Cooperative, Inc.
