Ag Market View for Nov 01.23
Prices were down $.02 – $.04 near the midpoint of the day’s range. Spot Dec-23 traded to its lowest level in 6 weeks with next support at the Sept-23 low at $4.67 ¾. Resistance is at the 50 day MA at $4.85. US harvest conditions will remain mostly favorable the balance of this week. Only light precipitation is expected across the northern third of the Midwest this weekend, before more general .50” – 1.25” rainfall over the ECB early half of next week. Today’s EIA weekly ethanol report showed production jumped to 1,052 tbd last week, up from 1,040 tbd the previous week and the highest production level since Aug-2023. Corn usage reached 105 mil. bu., well above the pace to reach the USDA forecast of 5.30 bil. bu. Despite the lofty production, stocks fell to 21 mil. barrels, the lowest since Dec-2021. Brazil’s Govt. estimates their corn exports in Oct-23 reached a record 8.45 mmt, up 24% from Oct-22. After the close the USDA reported corn used in the production of ethanol for Sept-23 reached 430 mil. bu., above the range of estimates of 395 – 422 mil. and up 12% from YA, vs. the USDA forecast of up 2.4%. This was the largest amount used in September in 5 years. While it is early, being the first month of data for the 2023/24 MY, it does support the argument for a higher USDA usage forecast. Export sales tomorrow are expected to range from 25 – 50 mil. bu.
The soybean complex was mixed with beans up $.03 – $.05, meal was steady to $2 higher, while oil plunged 100 – 150. It was an inside trading session for Jan-24 beans and Dec-23 meal while Dec-23 oil plunged to its lowest level since June-23. Another round of heavy rains are expected across Southern Brazil Thursday thru Sat. with additional flooding and crop damage likely before a much needed precipitation break early next week. There remains better prospects for rain in dry areas of WC Brazil next week, however a wholesale pattern shift appears unlikely. Forecasts for a more favorable weather pattern in Argentina remains consistent. There were no new export announcements today. Spot board crush margins slid $.23 today to $2.04 bu. Soybean oil product value dropped to 36.7%, the lowest in nearly 6 months. Census soybean crush in Sept-23 reached 174.7 mil. bu., up 4.2% from YA and in line with the USDA forecast for a 4% increase for the 2023/24 MY. Crush was a record high for September. Bean oil stocks came in right at expectations of 1.60 bil. lbs. Brazil’s Govt. estimates their soybean exports in Oct-23 reached 5.53 mmt, up 45.5% from Oct-22 and a record high for October. Export sales tomorrow are expected in a range from 35 – 55 mil. bu. of soybeans, 250 – 550k tons meal, and -5 – 10k tons of soybean oil.
Prices were steady to higher today with Chicago $.03 – $.05 better, KC was up $.09 – $.11, while MGEX was within $.01 of unchanged. Dec-23 contracts from all 3 classes experienced an inside trading session. Ukraine’s military claims that over the past 24 hours Russian jets have dropped explosive objects into the likely paths of vessel traffic in the Black Sea. Despite the news the “Humanitarian Corridor” continues to operate under the watch of Ukraine defense forces. Some rumbling that China may be interested in US HRW wheat with the recent price collapse. Still no confirmation of earlier rumors of Chinese interest in US SRW wheat. The lowest offer for Bangladesh’s 50k mt tender was $295/mt CF, no purchase has been announced yet. Jordan’s state grain buyer announced a tender that closes Nov. 7th for 120k mt of optional origin mill grade wheat for Jan/Feb-24 shipment. Russian media outlets are reporting the Kremlin is considering a 6 month ban on durum wheat exports starting Dec.1st. SovEcon lowered their Russian wheat export forecast by .4 mmt to 48.8 mmt as their Ministry of Agriculture attempts to create a price floor. The current USDA export forecast is 50 mmt. Export sales tomorrow expected to range from 10 – 20 mil. bu.
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