Ag Market View for Dec 12.23
Prices were up $.02 – $.04 closing near the midpoint of the daily range. Agricultural markets experienced a “Turnaround Tuesday” type trade with corn and wheat prices higher while the soybean complex was lower. Corn found support on hopes the Biden administration will include corn based ethanol to qualify for subsidies in the production of sustainable aviation fuel. An announcement is expected by the end of the week. Last month USDA Ag. Sec. Vilsack stated he felt ethanol would qualify for the subsidies available under the Inflation Reduction Act. Resistance for Mch-24 rests just above the market at the 50 day MA, currently $4.93, followed by the 100 day MA at $5.00. Support is at the Nov-23 low at $4.70. While there were no export announcements today US corn prices are below SA origin into Mch-24. Algeria reportedly bought Argentine corn as part of a 120k mt tender. Exact price and quantity not yet known. In a separate tender which closes tomorrow Algeria is also seeking 200k of feed corn in five 40k mt shipments in Jan-24. EU corn imports since July-23 have reached 7.6 mmt, down 43% from YA. Corn usage in the production of ethanol has leveled off between 5.2 and 5.350 bil. bu. the past few years. Being included in SAF market will provide a nice usage boost over time.
The soybean complex was lower across the board with beans down $.07 – $.12, meal was $2 – $3 lower, while oil was down 60 – 70. Jan-24 soybeans rejected trade above the 100 day MA overnight, while closing back below the 50 day MA at $13.26 ½. Jan-24 meal rejected trade above its 50 day MA overnight. Overnight strength in Jan-24 oil stopped just below its 50 day MA resistance, however the ensuing pull back held above support at $.50. Crop stress will be on the rise this week in northern growing areas of Brazil as showers will be scattered while temperatures warm to much above normal readings. Week 2 of the outlook continues to offer better prospects for widespread rain in drier areas. Conditions across southern Brazil are improving as heavy rain events are becoming less frequent. Weather conditions in Argentina remain mostly favorable. Spot board crush margins slipped a few cents to $1.33 ½ per bu. a 5 month low. The USDA announced the sale of 198k tons (7.2 mil. bu.) of soybeans to an unknown buyer. This AM ABIOVE lowered their Brazilian production forecast 2.8 mmt to 161.9 mmt. Most estimates are in the mid 150’s. ABIOVE also forecast Brazilian exports at 100.2 mmt and crush at 54.5 mmt, vs. the USDA estimates of 99.5 and 55.75 mmt respectively.
Prices were higher across all 3 classes today with Chicago and MGEX up $.16 – $.18, while KC surged $.22 – $.25. Markets recovered nearly all of yesterday’s sharp losses. Mch-24 Chicago closed very near its 100 day MA resistance at $6.27 1/2. Prices plunged yesterday on fears Chinese buying of US wheat was over and that the recent price surge made US wheat uncompetitive again in the global marketplace. No word on whether yesterday’s correction stimulated some additional demand however it is noted there was a bump up in Russian wheat values. Kansas crop ratings fell 1% to 39% G/E, however poor/VP also declined 1%, while fair was up 2%. Trade sources indicate Tunisia bought 100k mt of soft wheat for $278.70/mt CF and 75k mt of durum for $436.90/mt CF. Russia was the lowest offer for Bangladesh’s 50k mt tender at $317.56/mt CF. Results expected later. Egypt’s GASC estimate they hold nearly 5 months of wheat reserves. Ukrainian Govt sources suggest they could export up to 5 mil. mt of goods along the alternative Black Sea corridor in Dec-23, up from 3.8 mmt. EU wheat exports since July have reached 13.6 mmt, down 14% from YA.
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