Written Commentary
WHEAT
Prices were higher across all 3 classes in choppy 2 sided trade. Chicago led the way posting gains of $.09 – $.14, while both KC and MGEX finished $.05 – $.07 higher. Dec-23 Chicago closed at its highest level in just over 1 month, stopping just shy of its 50 day MA at $5.96. There were unconfirmed reports of Chinese interest in US SRW wheat from the US gulf. Dec-23 MGEX closed at a 3 week high. KC/Chicago Dec-23 spread fell to $.82 today, a 7 month low. Export sales at 23 mil. bu. were above expectations. YTD commitments at 394 mil. are down 5% form YA, vs. the USDA forecast of down 8%. The Brazilian Govt. has announced $79 in subsidies to help support domestic wheat prices for the 23/24 MY. Their minimum floor price for milling grade wheat is $17.36 per 60 kg bag.
CORN
Prices surged higher today with Dec-23 leading the charge closing $.13 higher. Deferred contracts were $.07 – $.10 better. Spot corn finally broke out of its $4.70 – $5.00 range it’s been trapped in for 2 months. Next resistance is the 100 day MA at $5.09 ½. There were unconfirmed reports of Chinese interest in US corn off the PNW. US prices have become competitive with Brazil in recent days. Ukrainian corn is still available cheaper than the US, however insuring the freight is likely the larger issue. Export sales at 35 mil. bu. were in line with expectations. YTD commitments at 637 mil. bu. are up 17% from YA, vs. the USDA forecast of up 22%. Mexico continues to be our strongest buyer having purchased another 10 mil. bu. last week. China’s Ag. Ministry has approved additional GMO corn varieties, bringing the total to 37. China has conducted a number of trials across 5 provinces and report impressive yield results. It remains to be seen whether they allow commercial planting of approved GMO varieties in 2024. China has a long standing goal of becoming more food independent.
SOYBEANS
The soybean complex was mixed with beans steady to $.05 better, meal was up $5 – $9, while oil was down 120 – 175. Overnight strength in Nov-23 beans stalled at its 100 day MA of $13.17 ½. Prices did hold above $13 with the AM pullback, only to surge back towards the highs in late trade. Dec-23 meal surged to its highest level in 3 months, stopping just shy of the July-23 high at $424.70. Next resistance is the June high at $432.60. Dec-23 bean oil rejected trade above $.56 earlier this week. An improved weather pattern starting this weekend is expected in Argentina. Brazil remains too wet across the south while the WC part of the country remains arid with much above normal temperatures thru the upcoming weekend. Brief cooling with scattered rains are possible early next week, however midday forecasts seemed to show less confidence beneficial rains will arrive. No pattern change is expected thru the early days of November. Bean export sales at just over 50 mil. bu. were at the high end of expectations. YTD commitments at 767 mil. are 31% below YA, vs. the USDA forecast of down 12%. Soybean meal sales at 435k tons were above expectations. 2023/24 US soybean meal exports are forecast at a record high for the 2nd consecutive MY benefiting from the Argentine drought. Spot board crush margins slipped $.04 today to $1.99 bu., however the bigger story was soybean meal product valued surging over 1% to 61.4%, a new 5 month high. Meal basis has been running hot, while oil has backed off. RIN values have slumped with buildup of renewable diesel supplies. This may impact biodiesel production, however shouldn’t impact renewable diesel. Oct 31st feedstock data will shed light on whether imported used cooking oil is cutting into bean oil usage for biofuels. The EIA will update biodiesel and renewable diesel capacity next Thurs. the 26th. To date China has approved 14 GMO soybean varieties.
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