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Ag Market View for Nov 5th

SOYBEANS

Soybeans ended lower. Since the high near 12.57 on Nov 3, SF has dropped to near 12.03. Next support 11.95. Market could trade back below 12.00 SF on talk that Brazil farmers sold remaining old crop soybeans. This allows exporters to offer a few cargoes of soybeans. Brazil crop is also being planted faster than normal which could suggest and early harvest and soybeans available for exports in Jan. Trade estimates US soybean crop at 4,484 mil bu or up 36 mil bu from USDA October guess. This week, one private crop group raised their crop guess 50 mil bu. Trade also estimates US 2021/22 soybean carryout near 362 mil bu vs USDA 320. Some are now over 500 mil bu due to estimates of lower US soybean exports. Some are as low as 1,875 mil bub vs USDA 2090. USDA estimates World soybean crop at 385 mmt vs 365 last year. Exports are est near 173 mmt vs 164 last year. USDA estimates US exports at 56 mmt vs 61 last year. Could be closer to 51. Brazil est near 93 mmt vs 81 last year. Could be closer to 98.

CORN

Corn futures ended lower. CZ is near is near 5.53. Range was 5.52 to 5.62. Since Nov 2 high near 5.86, CZ has dropped to todays low near 5.52. Next support is 5.43. Higher Ethanol margins and concern about US 2022 supply due to La Nina impact on summer Weather and higher planting cost reducing acres and yields helped prices rally. Open US harvest and favorable South America weather weighed on prices. There are reports that US farmers may be selling corn off the combine. Talk of lower US 2022 supply could offer long term support to 2022 corn prices. Trade estimates US corn crop at 15,050 mil bu or up 31 mil bu from USDA October guess. This week, one private crop group raised their crop guess 180 mil bu. Trade also estimates US 2021/22 corn carryout near 1,480 mil bu vs USDA 1,500. Some are closer to 1,300 mil bu due to higher demand. This week farmer consultants suggest farmers increase 2021 and 2022 crop sales. USDA estimates World corn crop at 1,198 mmt including 273 for China vs 1,115 last year when China crop  was 260. Exports are est near 202 mmt vs 178 last year. USDA estimates US exports at 63 mmt vs 70 last year. Could be closer to 68. Ukraine est near 32 mmt vs 24 last year. Brazil 43 vs 20 last year. Argentina 38 vs 37 last year.

WHEAT

Wheat futures were lower. Talk of tight global exporters supplies and higher Russia wheat prices and lower Russia and Europe exports has been supportive. Trade est US 2021/22 wheat carryout near 581 mil bu vs USDA 580. Some are closer to 620 mil bu due to lower. Trade estimates World wheat end stocks near276.5 mmt vs 277.2 in October and 288.3 last year. The estimate includes 141 mmt China and 28 mmt India. WZ rallied from a low on Sep 10 to a high near 8.07 on Nov 2. Some of the rally liked to tight World exporter stocks and lower crops in US and Canada. KWZ rallied for a July low near 5.90 to a high on Nov 2 near 8.14. KWZ is near 7.78 with next support near 7.66. MWZ rallied from a high in April, 2021 near 6.25 to a high near 10.86 on Nov 2. This due to large speculative buying due to lower US and Canada spring wheat crops. Drop in cash US HRS basis triggered long liquidation. Next support is near todays low at 10.05. US farmer advisors suggested US farmers increase 2021, 2022 cash sales and begin selling 2023. Black Sea Dec futures suggests an export tax of $101 vs $70 nearby. This could offer strong support to futures in 2022.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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