Written Commentary
Global Ag News for Dec 8.23
December 8, 2023
SOYBEANS
The soybean complex was mixed with beans up $.04 to down $.03, meal was steady to $6 lower, while oil is up 75 –85. Jan-24 soybeans held above yesterday’s low and closed above support at the 100 day MA, currently $13.43 ½. Bean oil continues to recover in step with the rebound in crude oil, next resistance for Dec-23 oil is this week’s high at 52.03. Spot board crush margins improved a few cents to $2.04 bu. and were up $.16 for the week. NOPA crush for Oct-23 will be out next Wednesday. Hot/dry conditions are expected to remain across the central and northern growing regions of Brazil for the next week to 10 days. Heavy rains return this weekend thru much of next week in Southern Brazil. Flooding will be a concern in RGDS and Santa Catarina. Extended forecasts continue to suggest better prospects for rain in the central and northern growing regions the last week of the month. Argentina remains mostly favorable with a good mix of sun and rain thru next week. Combined sales to China/unknown for the week reached nearly 2.85 mmt, or 104 mil. bu. Malaysian palm oil production in Oct. reached 1.937 mmt, above expectations of 1.88 mmt, and above the 1.818 mmt in Oct-22. Despite the higher production, palm oil stocks at 2.448 mmt was below expectations of 2.564, although well above YA supplies of 2.403 mmt. Ukraine’s total oilseed harvest has reached 20.2 mmt, which includes 11.5 mmt of sunflower seed, 4.7 mmt of soybeans, and 4 mmt of rapeseed. The BAGE reports Argentina’s soybean crop is 6% planted while holding their acreage forecast steady at 17.1 mil. HA, up 5.5% from YA. While US soybean inventories remain tight, global stocks continue to build. Yesterday’s USDA data shows global production is expected to jump 7.6% in 2023/24 to a record 400 mmt, with stocks/use rising to a 5 year high just under 30%. Stocks/use among major exporters is expected to reach 22%. With no US production data for 2 months, potentially longer if US Fed. Govt. shuts down for an extended period, SA weather will take center stage.
CORN
Prices were $.03 – $.04 lower today with Dec-23 trading to a fresh 2 year low. Next support is $4.56, the Sept. low on the weekly chart. Ukraine’s grain harvest has reached 51.3 mmt, of which 21.2 mmt is corn. The BAGE reports Argentina’s corn crop is 25% planted, which is unlikely to change much over the next several weeks as farmers attentions shifts to planting soybeans. Conditions improved over the past week with 24% of the crop G/E, up from 20% LW. 10% of the crop is rated poor, down 3% from LW. I expect US harvest to have reached 89-90% by Sunday. Yesterday’s USDA data shows global stocks/use are expected to rise to 12.5%, matching a 4 year high. Stocks/use among major exporters is expected to reach a 6 year high. Reaching this bar is highly contingent on SA production. Forecasts for center west and center south Brazil will be the main driver of corn values the next several months. With US supplies large, spreads remain wide encouraging farmers to store their crops.
WHEAT
The soybean complex was mixed with beans up $.04 to down $.03, meal was steady to $6 lower, while oil is up 75 –85. Jan-24 soybeans held above yesterday’s low and closed above support at the 100 day MA, currently $13.43 ½. Bean oil continues to recover in step with the rebound in crude oil, next resistance for Dec-23 oil is this week’s high at 52.03. Spot board crush margins improved a few cents to $2.04 bu. and were up $.16 for the week. NOPA crush for Oct-23 will be out next Wednesday. Hot/dry conditions are expected to remain across the central and northern growing regions of Brazil for the next week to 10 days. Heavy rains return this weekend thru much of next week in Southern Brazil. Flooding will be a concern in RGDS and Santa Catarina. Extended forecasts continue to suggest better prospects for rain in the central and northern growing regions the last week of the month. Argentina remains mostly favorable with a good mix of sun and rain thru next week. Combined sales to China/unknown for the week reached nearly 2.85 mmt, or 104 mil. bu. Malaysian palm oil production in Oct. reached 1.937 mmt, above expectations of 1.88 mmt, and above the 1.818 mmt in Oct-22. Despite the higher production, palm oil stocks at 2.448 mmt was below expectations of 2.564, although well above YA supplies of 2.403 mmt. Ukraine’s total oilseed harvest has reached 20.2 mmt, which includes 11.5 mmt of sunflower seed, 4.7 mmt of soybeans, and 4 mmt of rapeseed. The BAGE reports Argentina’s soybean crop is 6% planted while holding their acreage forecast steady at 17.1 mil. HA, up 5.5% from YA. While US soybean inventories remain tight, global stocks continue to build. Yesterday’s USDA data shows global production is expected to jump 7.6% in 2023/24 to a record 400 mmt, with stocks/use rising to a 5 year high just under 30%. Stocks/use among major exporters is expected to reach 22%. With no US production data for 2 months, potentially longer if US Fed. Govt. shuts down for an extended period, SA weather will take center stage.
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