Ag Market View for Nov 18th
Soybeans futures erased early gains on talk that EPA will announce biofuel mandates this week. Some fear if they extend the deadline for the mandate it could mean lower mandates. Soybean futures had rallied over initial resistance on new US soybean sales to China and talk that Argentina may soon turn drier. Weekly US soybean export sales were near 51 mil bu. Total commit is near 1,271 vs 1,669 ly. Lower commit has some dropping exports 100 mil bu and raising carryout to 440. China commit is near 18.8 mmt with 5.9 in unknown. Bears feel soybean prices are overbought without China buying large amounts of US soybeans. They are using a US soybean carryout closer to 500 vs USDA 340. Bulls look for new buying if Argentina weather turns drier. SMZ tested 379 on new tech chart related buying. Higher US domestic use has been supportive and helped US crush margins rally.
Corn futures rallied early in the session on new managed fund buying. End user are short and need to finish buying 2021 needs. They have little 2022 coverage. Weekly corn export sales were 35 mil bu. Total commit is near 1,298 vs 1,388 ly. China commit is near 11.9 mmt with 2.5 in unknown. Some still feel US corn exports could be 100-150 mil bu higher than USDA November estimate. Still higher Ukraine crop and increase Argentina’s export licenses could keep US exports from reach higher levels. Corn futures traded off session highs on talk EPA could announce biofuel mandates this week. An extension of complying to mandates could suggest final mandates could be reduced. Season to date corn used for ethanol suggest USDA may also be 100 mil bu to low in their estimate of corn demand. Higher demand could suggest a US carryout closer to 1,233 vs USDA 1,483. Bulls look for higher US demand and lower carryout as supportive and futures price objective closer to 6.00. Slow US corn sales and increase supplies in Ukraine could offer resistance. USDA estimates China corn imports near 26 mmt. Private commercials still holding out hope they will take 30 mmt. China commercials estimate imports closer to 20 mmt. China October corn imports were down 14 pct, sorghum up 57 pct and pork down 41 pct.
Wheat future have been trending higher on lower Canada and US spring wheat supplies, record low World exporters stocks to use ratio and higher Russia prices. Wheat futures some selling on talk Canada wheat exports could be slowed due to washout of rail service to Vancouver. This raised concern over increase exports to US. Wheat then rallied after Egypt higher tender prices and fact buyers are hand to mouth with little 2022 coverage. IGC lowered World wheat crop 4 mmt to 777 due to lower Iran crop. Typically, Iran tends to increase imports following a lower crop. They normally buy from Russia. Canada could also lower their crop on Dec 3. Jan Russia export tax is near $100. Either World wheat prices will need to rally to slow demand or higher Russia wheat prices could increase US wheat export demand. Weekly US wheat export sales were 14 mil bu with total commit near 503 vs 634 ly. On their November report, UDA lower US wheat imports but also lowered exports. This week Informa est US 2022 wheat acres near 49.4 million vs 46.7 ly. NOAA Dec-Feb SW weather forecast is warm and dry
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