Ag Market View for Nov 12th
Soybeans and soymeal traded sharply higher. Funds continue to buy soybeans as a hedge against inflation. They usually do this after the 8:30 reopen. SMZ has jumped $56 from the Oct 13 low and pushed above key moving average resistance on talk that reduced China exports of lysine to US has increased the demand for soymeal. Soybeans also supported by fact USDA did not increase the US 2021/22 soybean crop or carryout as much as market feared. Some feel that post USDA report, SF may now be in a 12.00-12.75 range. Dalian soymeal was higher. Weekly US soybean export sales were near 47 mil bu. Total commit is near 1,223 mil bu vs 1,831 ly. China commit is near 18 mmt with 5.8 in unknown. Well behind what they bought last year. Market remains concern that favorable start to South America crops and slow China buying is negative.
Corn futures ended higher. CZ ended near 5.77. Range was 5.66-5.82. Funds have been net buyers near 5.49 and after the USDA November report. While USDA increased the US crop they also raised ethanol use. Some feel that USDA may still be too low in total demand which suggest they may be too high in their carryout guess. USDA estimate of World exporters corn stocks to use ratio increased slightly but that included a 36 mmt increase in South America production. Conab this week estimated Brazil corn crop at 116 mmt vs 87 last year. Matif corn futures corn futures higher. China buying Ukraine corn. China could buy US 2022 DDG. US corn commit to China near 12 mmt. Ukraine 7-8 mmt. USDA est imports 26 mmt. China 20 mmt. US cash corn basis jumped this week due to slow farmer selling and strong ethanol margins. This helped CZ gain on CH22. 29 pct of Argentina corn is planted. Crop rated 84 pct G/E up 2 from last week. Weekly US corn export sales 42 mil bu. Total commit is 1,262 mil bu vs 1,345 ly. USDA goal is 2,500 vs 2,753 ly. Some feel exports could reach 2,700. Trade could also see final US ethanol corn use closer to 5,400 vs USDA 5,250. Higher total demand could lower US 2021/22 corn carryout to 1,240. This could suggest little room for any 2022 weather problem. Trade already concern that US 2022 corn crop could be lower due to higher cost of planting.
Wheat futures ended mixed. Chicago and KC wheat made new highs. Minneapolis ended lower. Some of the bloom may be off the US HRS futures. Some feel end users may have made plans to use less HRS in flour blend. As futures trend higher US HRS basis continues to fall. WZ and KWZ are making new highs. Higher EU and Russia prices supportive. Talk of lower EU and Russia export supplies should continue to offer support to Chicago and KC. This despite fact both markets are becoming overbought. Australia wheat futures higher due to wet harvest. Drier weather next week. Weekly US wheat export sales only 10 mil bu. Total commit is 488 vs 626 last year. US wheat export prices more competitive in 2022 but little extra supplies for export. N Africa and Middle East buyers are short. US Millers only 50 pct covered for Q1 and 20 pct Q2.
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