Written Commentary
Ag Market View for Sept 28.23
September 28, 2023
SOYBEANS
Soyoil gained on soymeal. China reported 27,000 new cases in Shanghai, just below the record this past April. Despite this China soybean crush is expected to increase over the next 2 weeks as the country readies for the holiday season culminating in Chinese New Year. US soybeans are arriving, and crushers continue to suggest more US beans could get bought for January shipment. Beyond January, it looks like Brazil takes over. Overall Chinese bean purchases for 2022-23 may remain under the USDA estimate of 98 mmt. Some are using 95 mmt, maybe lower as total 2022-23 Chinese crush will struggle to hit 92 mmt. SF remains rangebound between 14.00 and 14.50.
CORN
Corn futures ended lower. The corn market lacks new and fresh news. Bulls contend that strong domestic basis to feeders and crushers offers support. Lack of farmer selling also support futures near 6.50 CH. An open Ukraine export corridor and lower South America corn prices offers resistance. US corn exports to date are 30 pct less than last year. EU corn users are buying less corn due to lower margins and continues culling due to bird flu. Argentina weather remains dry. There is talk that Argentina wheat crop could be half of last year due to the dry weather. This could raise concern about their corn crop. There is talk that Ukraine corn harvest is 50 pct done and farmers may decide to let the rest of the crop remain in the fields. This could reduce the supply for export but could also reduce 2023 corn acres if farmers have to harvest the crop first. There is also talk 2023 acres could be down due to lack of seed and fertilizer. CH is back below 6.60. Next support is the 100 day moving average near 6.57. Next support is near the recent low near 6.53. Open interest continues to drop. Volume has also dropped as many traders may have closed trading for holiday and yearend. Need a weather problem in South America to push prices back to the upper end of the recent trading range.
WHEAT
Wheat futures ended lower. WH is near 8.00 support. KWH is near 9.00 support. MWH is near 9.50 support. Chicago March wheat futures are becoming oversold. Open interest continues high but trade volume is down. Lack of new demand for US wheat exports and lower Russia wheat exports prices offers resistance. KWH is also back to near September lows. Talk that EU wheat is coming into Florida for a mill near Tampa offers resistance. EU wheat is $80 lower than US domestic HRW prices. US south plains dry weather, lower Argentina supply and drop in Australia wheat quality could offer support. MWH is near 100 day moving average support with steep drop in open interest. Drop in global wheat import demand and lower Russia export prices offers key resistance to wheat futures. Uncertainty about outlook for US economy could also reduce US consumer food demand.
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