Ag Market View for Nov 3.23
After holding support above the Sept-23 low, prices surged closing $.07 – $.08 higher. While prices were still down for the week, Dec-23 closed above yesterday’s high of $4.77 a strong signal the fall lows are in. Next resistance is the 50 day MA, currently $4.84 ¼. Agricultural markets were fueled by a weak US $$ and the need for more weather premium. It should be a good harvest weekend in the NC US Midwest and ECB before shower activity picks up in these areas early next week. There were no export announcements today. Ukraine’s exports since July have only reached 3.94 mmt, down 47% from YA. Yesterday the Rosario Grain Exchange est. Argentine corn plantings had reached 25%. Later the BAGE suggested plantings were 23.4% complete while holding their planted acres forecast steady at 7.3 mil. HA.
Spread trading in soybean products remains extremely volatile with meal sharply higher, while oil was sharply lower partially due to lower energy prices. Soybeans surged to new highs late, closing $.22 – $.25 higher. Jan-24 soybeans traded thru several technical resistance levels forging a new 6 week high. Dec-23 meal surged back above $440 however held below last week’s contract high at $448.40. Dec-23 oil rejected trade above both $.51 and $.50 making a fresh 5 month low before bouncing late. Spot board crush margins were steady today however plunged a staggering $.63 this week to $1.88 bu. Soybean oil PV fell to 35.8%, the lowest since Feb-2021. Brazil’s forecast continues to threaten new crop production with conditions too wet in the south and too dry in the north. The latest round of heavy rains in Southern Brazil is expected to end this evening. Saturated soils will prevent timely planting of corn and soybeans while flooded and washed out fields will need to be replanted. The USDA announced the sale of 131k tons (5 mil. bu.) of soybeans to an unknown buyer. China was also rumored to have purchased several hundred thousand tons of US beans for Q1 2024. Oil World analyst Thomas Mielke forecasts global palm oil production will grow only .2 – .3 mmt in 2023/24, the lowest rate of growth in 4 years. The lower growth is being attributed to reduced yields in Indonesia and Malaysia due to El Nino. Ukraine’s vegetable oil exports in October reached .509 mmt up 6% from Sept.
Prices were higher across all 3 classes at today as wheat was able to participate in the broad based commodity rally. MGEX and Chicago were up $.06 – $.10 while KC was $.02 higher. Resistance for Dec-23 Chicago rests at the 50 day MA currently $5.82 ¼. The UN’s FAO global food price index fell .7 points in October to the lowest level since Mch-2021. The BAGE lowered their Argentine production forecast .8 mmt to 15.4 mmt, vs. the USDA est. of 16.5 mmt. Russia lowered their wheat export tax to 4,530 roubles/mt down from 4,923 previously for the period ending Nov. 14th. The US reportedly sold 50k mt of various classes of milling wheat to a South Korean flour mill. While recent rains have cut into the moisture deficit across much of the southern US plains, areas in W Kansas and the TX panhandle have been dry as of late. The NWS 6-10 day forecast does show a return of above normal precipitation by mid-November.
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