Ag Market View for Nov 17th
The soybean market was lifted aggressively today by the announcement of a US sale of soybeans of 132,000 tonnes to China. In fact, January Soybeans made a 34-day high and probably saw some inflation-based buying along with the commercial/hedge buying. Also contributing to the upward action in beans today were reports of strong demand for edible oils. However, soybean oil gains were undersized relative to soybeans gains which in turn could suggest soybean oil is not perceived to be an undervalued deflated commodity.
The grain markets appear to have been lifted during Wednesday’s trading session by a revival of export demand and by inflationary interest in many physical commodities. The corn market rallied despite news that Argentine corn plantings will rise by 1% perhaps because South Korea purchased 138,000 tonnes of corn today. With the cash corn market flat early on, the sharp gains in corn futures were obviously inspired by fundamentals beyond the farm. Ethanol production for the week ending November 12th averaged 1.06 million barrels per day. This is up 2.02% vs. last week and up 10.19% vs. last year. Total Ethanol production for the week was 7.42 million barrels. Stocks as of November 12 were 20.081 million barrels. This is down 1.01% vs. last week and down 0.60% vs. last year. Corn used in last week’s production is estimated at 107.61 million bushels. This crop year’s cumulative corn used for ethanol production for this crop year is 1.08 billion bushels. Corn use needs to average 100.082 million bushels per week to meet this crop year’s USDA estimate of 5.25 billion bushels.
With Chicago wheat forging a new contract high and strength throughout the grain complex, we suspect a measure of inflation related buying lifted wheat prices during Wednesday’s trading session. While the US missed out on some export business, news that Russia is seeing demand from Algeria, Japan, and China provided the bull camp with fresh confidence. Another positive development was a Turkey tender to buy 385,000 tonnes of wheat. Apparently, the wheat market is unconcerned about reports that good soil moisture Indian for the 2022/2023 crop conditions looks to put Indian production at record levels!
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