Ag Market View for Dec 13.23

CORN

Prices were down $.04 – $.06 today.  Ag. markets were today pressured by Argentina’s announced economic policy changes and growing confidence in a more favorable long range forecast in South America.  The Argentina Govt. plans to slash government spending, reduce energy and transportation subsidies while devaluing the peso to 800 per US $$, from the current 365.  They also announced they’d work toward eliminating export taxes, something that may prove difficult as that would require a vote from Congress.  Resistance for Mch-24 rests just above the market at the 50 day MA at $4.92 ½, followed by the 100 day MA at $4.99.  Support is at the Nov-23 low at $4.70.  No export announcements today.  Ethanol production slipped to 1,074 tbd last week, above expectations and well above the pace needed to reach the USDA usage forecast of 5.325 bil. bu.  Given the recent uptick in production with a decision on corn based ethanol possibly qualifying for tax subsidies for SAF later this week, bulls remain hopeful for higher corn usage heading into 2024 despite the recent margin pullback.  Gasoline consumption rose 4.6% last week to 8.859 mil. barrels per day, and was up 7.3% YOY.  Before eliminating export taxes there is the potential for Argentina to raise their export tax on grains to 15% from the current 12%.  Brazil’s corn exports are seen reaching 7.14 mmt in Dec-23, down from 7.4 mmt in Nov-23 however a record high for the month.  Since July 1st Ukraine has exported 7.4 mmt of corn, down 32% from YA.  Export sales tomorrow are expected to range from 30 – 65 mil. bu.

SOYBEANS

The soybean complex was lower across the board today with beans down $.12 – $.16, meal was $6 – $8 lower, while oil was down 40 – 60.  Jan-24 soybeans once again challenged the $13 level with better support at last week’s low at $12.92.  Longer term support at the Oct-23 low at $12.70.  Jan-24 meal fell to a 2 month while also violating the $400 price level before rebounding.  Jan-24 oil slipped back below $.50 with next support major support near $.4850.  Crop stress is on the rise this week in northern growing areas of Brazil as temperatures surge.  Longer range forecasts continue to suggest welcome rain relief late next week.  Conditions across southern Brazil have improved as heavy rains have become less frequent.  Weather conditions in Argentina remain mostly favorable.  The USDA announced the sale of 125k tons (4.6 mil. bu.) of 2024/25 soybeans to an unknown buyer.  Brazil’s soybean exports are expected to slip to 3.45 mmt in Dec-23, down from 5.2 mmt in Nov-23, however up from 2 mmt in Dec-22.  Soybean meal exports are seen reaching 2.2 mmt in Dec-23.  Spot board crush margins slid another $.08 today to $1.25 ½ bu., a new 5 month low.  NOPA crush est. for Nov-23 are out at 11 AM CST on Friday.  Tomorrow’s export sales are expected to range from 35 – 70 mil. bu. of soybeans, 100 – 600k tons for meal, and 0 – 15k tons of oil.   

WHEAT

Prices were sharply lower across all 3 classes as the day to day choppiness continues.   Chicago and MGEX were down $.15 – $.20, while KC plunged $.22 – $.25.  Mch-24 Chicago closed below yesterday’s low, however held above the 50 day MA support at $6.00 ¼.  Mch-24 KC briefly traded below this week’s low of $6.30 ¼.  Algeria reportedly bought over 900k mt of milling wheat at around $273/mt CF, likely sourced from the Black Sea region for Feb/Mch-24 shipment.  Since July 1st Ukraine has exported 6.3 mmt of wheat, down 15% from YA.  Ukrainian officials are optimistic total exports in Dec-23 can reach 5 mmt up from 3.8 in Nov-23 utilizing the humanitarian corridor.  The US southern plains is receiving a healthy dose of rain midweek helping build moisture reserves for the US winter wheat crop.  Export sales tomorrow are expected to range from 44 – 58 mil. bu. reflective of last week’s large announced sales to China.  

See more market commentary here.

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