Ag Market View for Nov 2.23
Disappointing trade action in corn considering strong ethanol data for September as prices settled $.04 – $.05 lower. Dec-23 made a fresh 6 week low however held support above the Sept-23 low at $4.67 ¾. No major threat to remaining harvest in the US. This week’s updated Drought Monitor showed significant reductions in US cropland in drought. Export sales last week at 30 mil. bu. were at the low end of expectations. YTD commitments have reached 720 mil. up 26% from YA, vs. the USDA forecast of up 22%. Current commitments represent only 36% of the USDA forecast, below the historical average of 42%. I look for the USDA to lower their current export forecast by 50 mil. bu. next week to 1.975 bil. USDA census data showed 430 mil. bu. of corn was used in the production of ethanol in Sept-23, up 12.2% from YA and the most corn used during the month in 5 years. The USDA forecast for corn used in the production of ethanol at 2.30 bil. bu. is up 2.4% from YA. The Rosario Grain Exchange est. Argentine corn plantings have reached 25%. US corn area in drought plunged 13% last week to 36%, the lowest since May-23.
The soybean complex was mostly higher as volatility in product trading accelerated today. Soybeans were up $.10 – $.13 finishing near session highs. Jan-24 soybeans stopped just below resistance between $13.31 and $13.34. Bear spreading was evident in meal with prices closing down $4 to slightly higher in deferred contracts. There was reversal action in oil today as prices to closed 40 – 70 higher after establishing 5 month lows in early trade. Spot board crush margins slumped another $.17 today to $1.87. Soybean exports at 37 mil. bu. were at the low end of expectations. YTD commitments are down 28% from YA, vs. the USDA forecast of down 12%. Soybean meal exports were disappointing at only 86k tons, however YTD commitments remain 41% over YA vs. the USDA forecast of up 5%. Wire services comments overnight expect Chinese imports to remain strong thru year end bringing 2023 soybean imports to a record 105 mmt, up 15% over 2022. Census crush in Sept-23 at nearly 175 mil. bu. was a record for the month and up 4.2% over YA. Bean oil stocks at 1.60 bil. lbs. were in line with expectations and the lowest monthly figure since Dec-2017. US soybean area in drought plunged 14% last week to 38%, matching the low from Aug-23.
Prices were $.01 – $.04 higher across all 3 classes today. Export sales were weak at only 10 mil. bu. bringing YTD commitments to 418 mil., down 7% from YA, vs. USDA forecast of down 8%. Still no indication of additional US wheat purchases by China. Japan purchased 113.5 mmt of food grade wheat from multiple sources including 25.1 mmt of US white and 20.7 mmt of US durum. US winter wheat area in drought fell 7% last week to 42%, marking a 52 week low. The BAGE lowered their Argentine production est. .8 mmt to 15.4 mmt, vs. the USDA forecast of 16.5 mmt.
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