Written Commentary
CORN
Prices were $.02-$.03 higher today as spreads have pulled back a touch. Dec-24 closed back above its 100 day MA at $4.18 with next major resistance not until the Oct-24 high at $4.34 ¼. Support below the market is at the 50 day MA, currently $4.08 ¾. A few waves of precipitation are expected to sweep across the central Midwest over the next 7 days, however will likely not slow US harvest very much as progress hits the home stretch. The USDA announced the sale of 100k mt (4 mil. bu.) of corn to an unknown buyer. Ethanol production surged to 1,081 tbd LW, up from 1,042 tbd the previous week and up 4% from YA. Production was above expectations and a MY high. There was 108.7 mil. bu. of corn used, or 15.5 mil. bu. per day, well above the 14.93 mbd needed to reach the USDA forecast of 5.450 bil. Despite production being above expectations ethanol stocks fell slightly to 22.2 mil. barrels just above the 21.4 mb from YA. Implied gasoline usage rose 2.5% to 8.838 mil. barrels per day, however was down less than 1% from YA. At the moment I do not expect the USDA to change their corn usage forecast in the Nov. 8th WASDE report. Brazil’s corn exports are expected to reach 6.24 mmt in Oct. slightly below the 6.4 mmt in Sept. and well below the record 8.45 mmt they shipped in Oct-23. Tomorrow’s weekly export sales report is expected to be huge given large amount of announced sales last week. Analysts expectations range from 105-160 mil. bu.
SOYBEANS
Prices finished mixed with beans up $.02-$.06 while both products were lower as meal was off $1-$3 and oil 10-30 lower. Bean spreads were stronger while both product spreads were weaker. Spot board crush margins plunged a quick $.18 to $1.72 ¾ per bu., with little change in product values. The rebound in Nov-24 beans stopped just shy of the $10 level with next resistance at its 50 day MA at $10.06 ½. Rally attempts in Dec-24 meal have been capped near its 50 day MA, currently at $319.80. Overnight strength in Dec-24 oil stopped just shy of the $.44 level before pulling back. Healthy rains fell across central growing regions of Argentina the past 24 hours helping improve crop prospects. Growing regions in the north however remain in a dryer than normal pattern. Key growing areas of Brazil will continue to receive a good mix of rain and sunshine is over the next few weeks keeping the outlook for planting progress and crop development favorable. The USDA announced the sales of 130k mt (4.8 mil. bu.) of beans to China and 259k mt (9.5 mil. bu.) to an unknown buyer. Brazil’s soybean exports are expected to reach 4.63 mmt in Oct. below the 6.1 mmt in Sept. and down from 5.60 mmt in Oct-23. Low commodity prices and high production costs have triggered a surge of farm bankruptcies in Brazil. In the first 6 months of 2024 farm bankruptcies have reached 207, three times the total from Jan-June of 2023. Export sales tomorrow are expected to range from 45-90 mil. bu. of beans, 150-400k mt of meal, and 10-40k mt of oil.
WHEAT
Choppy trade in the wheat market resulted in a mixed close with Chicago steady to $.02 higher, while MGEX and KC were steady to $.01 lower. After holding support above yesterday’s low, Dec-24 CGO closed back above its 50 day MA with next resistance is the 100 day MA at $5.85 ¾. Same story with KC and MGEX Dec-24 contracts with resistance at $5.94 and $6.29 ½ respectively. Extended forecasts show much above normal temperatures across the nation’s midsection will extend into early November, with better prospects for widespread rains in week 2 of the outlook. A dryer than normal trend is still being felt in Western Australia. Overnight Russian Pres. Putin at a BRICS summit again purposed a grain exchange for its bloc of countries that would allow for fair price discovery, become a predictable indicator of price, while also help play a role in global food security. Export sales tomorrow are expected to range from 15-25 mil. bu.
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