Written Commentary
CORN
Prices turned steady to $.01 lower however spreads firmed. Mch-25/May-25 had traded to $.05 ½, an 8 month high. Mch-25 traded to its highest level in a week however quickly stalled out pulling back to its 50 day MA support at $4.33 ¼. Corn usage for ethanol production in Oct-24 reached just over 460 mil. bu., slightly below the Ave. guess and down 2 mil. bu. from Oct-23, however within the range of estimates. Usage for Sept-24 was revised up by 7 mil. bu. to 447 mil. In the first 2 months of the 24/25 MY corn usage has reached 908 mil. bu. the highest level in 6 years and is up 2% YOY vs. the USDA forecast of up less than 1%. At midday wire services reported the Biden Administration will not finalize guidelines on new clean fuel production credits before leaving office next month. This was likely the main reason for the pullback in corn as it appears unlikely ethanol will participate in the production of SAF anytime soon. Last week money managers were net sellers of just over 17k contracts of corn, reducing their long position to 97k contracts. EU 24/25 corn imports as of Dec. 1st have reached 8.5 mmt, up 10.4% from YA.
SOYBEANS
Prices were higher across the complex with beans up $.04-$.06, meal was $2-$3 higher while oil was up 60-70. Spreads were steady to firmer across the complex as well. Jan-25 beans stalled at $9.99 and remain stuck between $9.75-$10. Next resistance not until the 50 day MA at $10.14. So far Jan-25 bean oil stalled near its 100 day MA resistance at 42.46. Inside trade for Jan-25 meal as it consolidates near $290 per ton. Census crush in Oct-24 at nearly 216 mil. bu. was above expectations and a new record high. Production was up 16% from Sept-24 and 7% YOY. In the first 2 months of the 24/25 MY crush has reached a record 402 mil. bu. up 7% from YA vs. the USDA forecast of up 5.4%. Despite the higher than expected crush, bean oil stocks fell to 1.486 bil. bu. down from 1.501 bil. last month vs. expectations for a mild build. Stocks at the end of Oct were the lowest in over a decade. Spot board crush margins improved $.07 to $1.10 ¾ bu. with bean oil PV rebounding to 42%. Recent rains across key growing areas of Argentina have helped restore subsoil moisture. Although a dryer trend is expected over the next week to 10 days, this will enable farmers to advance corn and soybean plantings and wheat harvest. In Southern Brazil and Paraguay too much rain over the next week may produce localized flooding. Conditions across central and northern regions of Brazil remain favorable. MM’s were net sellers across the complex selling nearly 14k beans, 33k bean oil and 12k meal. Their short position in meal has swelled to over 75k contracts and within 2k of its record large short. EU 24/25 soybean imports as of Dec. 1st have reached 5.46 mmt, up 12.3% from YA. Meal imports at 8.15 mmt are up 28.5%.
WHEAT
Prices eased into the close settling steady to $.02 higher across all 3 classes. Mch-25 Chicago and MGEX continue to hold support above their August contract lows. KC Mch-25 made a new low yesterday. Crop ratings in Kansas did improve 1% to 56% G/E vs. only 40% YA. Last week MM’s were net sellers of 7.6k Chicago, 1.3k KC and just a couple hundred MGEX wheat. The combined MM net short position in wheat has grown to 120k contracts, the largest in 4 months, however so far lacks the spark to ignite a short covering rally. Jordan didn’t purchase any wheat in their recent 120k mt tender. Russian wheat conditions show 37% of the crop is rated poor, the worst ratings in a decade making the crop more vulnerable to winter kill if conditions turn harsh this winter. Above normal precipitation in SE Australia will likely slow harvest and possibly raise wheat quality concerns. EU 24/25 soft wheat exports as of Dec. 1st have reached 9.48 mmt, down 31% from YA.
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