Ag Market View for Nov 11.22

SOYBEANS

Soybean futures ended higher. Some link this to fact China reduces some of their strict rules on Covid. This raised hope China would buy more imported soybeans. There is talk that China needs to buy 2-4 mmt to finish nearby coverage and before 2023 Brazil harvest. There was also talk that protest continue in Brazil after the President election. New President does not want cap on spending but no plan on how to pay for the new spending. This could push Brazil into a recession. Argentina farmer has stopped selling beans on news Argentina may offer soon another soy peso deal that could pay farmers 220 peso for beans vs official rate of 160. Since early August Jan soybeans has been in a 13.70-14.70 range. China demand is supportive. Talk of record 2023 South America supply offers resistance. Some est US 2021/22 soybean carryout closer to 280 than USDA 220 due to lower exports. Some feel higher US 2023 crop could increase 2022/23 carryout to 400.

Grain bins at dusk

CORN

Corn futures ended higher on reduced volume. Since early August, CH has been in a 6.60-7.00 range. Low US corn exports and increase competition from Brazil and Ukraine lower priced export has US total export commit 54 pct down from last year. USDA est World corn trade at 182.7 mmt vs 201.8 last year. Brazil 47.0 vs 44.5 ly, Argentina 41.0 vs 36.5, Ukraine 15.5 vs 27.0 and US 54.6 vs 62.6. EU imports are est at 20.0 but could be closer to 30.0. Mexico 17.7 vs 17.5 ly. Trade is waiting for news about Ukraine export corridor. Delegates at Geneva Ukraine corridor meeting left for the day with no resolve. Most in the trade feel a deal will be struck but not just when. Lower US Dollar is supporting corn but Brazil and Ukraine corn export prices are still lower than US. Funds are liquidating corn call longs and adding to long puts. Today’s corn daily volume is down vs last few days. Open interest is beginning to drop. Some feel that lower US corn exports could increase US 2021/22 carryout to closer to 1,250 mil bu vs USDA 1,182. Same group could see 2023 US corn acres close to 92.0, yield 181.0 and 2022/23 carryout near 2,000 mil bu. After USDA Nov report and big drop in US Dollar, corn traders will focus on Ukraine export deal, SA weather and domestic demand vs export and direction of energy market and demand for US fuel. Brazil farmers continue to see good weather with USDA est 2023 corn crop at 126.0 mmt vs 116.0 ly.

WHEAT

Wheat futures ended higher. Market is waiting on news about drop in sanctions for large Russian Bank. Dropping of sanctions could help increase Russia wheat exports. Funds are adding to wheat long calls after WZ held 8.00. Argentina wheat crop is smaller. US south plains remains dry. Large pct of Australia wheat crop could grade feed. All this could reduce supply of global milling wheat .Since early July WH has traded in a 8.00-950 range. Low US wheat exports offers resistance. Any talk of restricted Russia exports offers support. USDA est World 2022/23 wheat crop near 782.7 vs 779.4 ly. China 138.0, EU 134.3, India 103.0. Those 3 account for almost 50 pct of World total. They est exports at 208.6 vs 202.0 ly. End stocks are 267.8 versus 276.3 ly. China 144.3 or 54 pct of total. Wheat risk is high depending on pace of Russia exports, 2023 north hemisphere crops and any new headline impacting US Dollar and World economy. USDA est global wheat imports at 202.6 mmt vs 198.0 ly but actual trade is running behind ly. USDA est US 2022/23 US wheat carryout near 571 mil bu. Some could see increase in acres and yield and forecast 2023/24 wheat carryout at 660.

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