Written Commentary
Ag Market View for Sept 28.23
September 28, 2023
SOYBEANS
Soybean ended higher. Russian missile attack on a Poland city sent shock waves through the grain futures market. Soybean were marginally lower on concern about weak China economic could slow China raw material imports including soybeans. Dalian soybean, soymeal, soyoil and palmoil futures were lower. Matif rapeseed futures traded to 4 week lows. Brazil weather is mostly normal. RGDS could use a rain. Brazil soybean exports prices are below US Jan forward. US October soybean crush was slightly higher than last year. End of October soyoil stocks were below last year. SF had an outside day and ended above last weeks highs. SE Argentina is dry. Farmer selling there has stopped as farmers wait for another soya peso deal. Season trend suggest July soybean futures tend to trend higher from October lows to pre South America harvest.
CORN
Corn futures ended higher. Russian missile attack on a Poland city sent shock waves through the grain futures market. Corn was marginally lower on concern about weak demand for US corn exports and rains in South America. Dalian corn futures were lower. Brazil weather is mostly normal. RGDS could use a rain. Brazil and Ukraine corn exports prices are below US. Matif corn traded lower on the threat of increased volumes of Ukraine corn moving to the EU at very competitive prices. Ukraine Fob is still not well defined (there is optimism about the corridor but it is still not a done deal). Ukraine corn is €45-50 cheaper than French replacement! And at the same time, Polish corn also remains considerably cheaper than French into N Europe. EU showed another big week of corn imports at 670 mt, the July-June season total of 10.9 mmt is well over double last year’s 4.8 mmt. Oct-Sep at 4.2 mmt is over four times last year’s level. The head spinning missile attack on a Poland city adds uncertainty to UN and NATO support to extend Ukraine export corridor. G20 leaders are together and World is waiting for some official reaction to the Russian missile attack on Poland. CH tested 6.53 low before rallying to a high near 6.77. This a big outside day trading above Mon high. CH is trading lower seasonally with a bottom expected in early Dec. July corn then tends to trend higher into South America harvest.
WHEAT
Like many markets wheat futures rallied on the news that Russia missiles had hit a city in Poland. World is waiting for a response from G20 members. Matif wheat opened lower despite another big week of exports from Brussels, and despite reports that France had sold several wheat cargoes to China for Jan-Mar. Brussels now shows EU exports to be 10 pct ahead of last year with some estimates closer to 18 pct. That would be an annualized 38-39 mmt and the EU domestic wheat S&D could not handle that. Early talk on the future of Ukraine export corridor was again conflicting. Russia missile attack on Poland could jeopardize the deal. Before the attack Russia wanted to see the banking codes that confirm that Rosselkhozbank has indeed been re-instated in the SWIFT system, before giving the green light. The USDA 42 mmt Russia wheat export estimate could have gone higher if the sanctions are lifted. Russian missiles also attacked Ukraine causing massive damage to Ukraine’s energy infrastructure. KC July 23 futures tend to trend sideways into early 2023. Key is US spring weather if futures traded higher either in early Feb or early March.
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