Ag Market View for Oct 12.22


Soybeans ended higher. USDA lowered US 2022 soybean crop and did not increase US 2022/23 carryout. Fact USDA announced new US soybean sales to China offered support before the USDA numbers. USDA increased US soybean crush 10 mil bu due higher soymeal domestic use. USDA did drop exports 40 mil bu and some feel they may be 145 mil bu too high. USDA raised Brazil soybean crop 3 mmt to 152. They left Argentina at 51 despite talk the crop is near 49. USDA raised China soybean imports 1 mmt to 98 vs 90 ly. Bears feel final US 2022/23 soybean exports will end up lower. This could weigh on prices. Crop watchers noted that US soybean yield was down but certain states yields were above expectations given a warm and dry summer. This remains impressive gains in seed performance. USDA estimate of record 2023 South America soybean crop could also be negative to futures long term.

Hightower Chart 1012.22


Corn futures ended sharply unch. Corn futures continue to struggle near summer highs. USDA lowered US corn crop as expected. Yield is now 171.8. Crop watchers noted that US corn yield was down but certain states yields were above expectations given a warm and dry summer. This remains impressive gains in seed  performance. USDA added 50 mil bu to feed and residual, dropped ethanol 50 and exports 125. Some feel they could lower exports another 150. USDA est US 2022/23 corn carryout at 1,172 vs 1,219 in Sep. Some could see carryout even higher. USDA lowered World corn end stocks 3 mmt to 301.1 vs 307.0 ly. 2021/22 is down 5 mmt. World corn exports are at 183.0 mmt vs 202.9 ly. US is 54.6 vs 62.7 ly, Brazil 47 vs 44, Ukraine 15.5 vs 27.0 ly. Argentina 41.0 vs 44.5. China crop was left at 274.0 and EU imports were raised 1 mmt to 20.0 and vs 20.0 ly. Bears still feel USDA could lower US export demand and higher final carryout. There was talk today that Putin has no interest in ending the Ukraine export corridor. This may have offered resistance to wheat futures which may spilled over to corn.

Hightower Chart 10.12.22


Wheat futures ended lower. USDA lowered US wheat carryout to 576 from 610. Lower crop was offset by 50 mil bu drop in exports, 30 mil bu drop in feed use and 10 mi bu increase in wheat imports. World wheat exports were left at 208.3 vs 202.7 ly. Russia is 42.9, EU 35.0, Canada 26.0, Australia 25.0, US 21.1, Argentina 12.0 and Ukraine 11.0. USDA lowered HRW end stocks 3 mil bu, SRW 34 and increased HRS 3 mil bu. Lower supply could help US Q4 basis. Pending US RR strike could impact Domestic movement. Escalation in Ukraine war could impact World wheat trade. US wheat ending stocks 576 million bushels vs average trade guess 563 million bushels bearish. World wheat stocks 267.5 mmt vs average trade guess 267.9 mmt neutral. Wheat traded lower on unwinding short soybeans and long wheat. Cuts to ending stocks of HRW not a surprise nor increase in spring ending stocks. Large cut to SRW ending stocks a larger surprise.

Hightower Chart 10.12.22

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