Ag Market View for Oct 16.23
Prices were mixed with Chicago and KC steady to $.02 lower, while MGEX finished $.04 – $.07 higher. Chicago Dec-23 made a new monthly high before pulling back. Next resistance is the 50 day MA at $6.01 ½. Ukraine estimates that Russian missile and drone attacks on port facilities and vessels since July have destroyed nearly 300k mt of grain. They also estimate these attacks have reduced their grain export potential by 40%. Export inspections at 13 mil. bu. were in line with expectations. YTD inspections at 248 mil. are down 28% from YA, vs. the USDA forecast of down 8%. IKAR estimates Russian wheat prices for export were at $225/mt FOB at the end of last week, down from $230/mt the previous week. SovEcon est. Russian wheat exports last week reached 1.0 mmt. MM’s last week were net sellers of just over 5,500 Chicago wheat and 2,000 KC wheat extending their short positions to 104k and 26k respectively. The Chicago short position is the largest in 4 months, while the largest since Aug-2020 for KC wheat.
Prices were $.03 – $.04 lower today as Dec-23 remains stuck between $4.70 – $5.00. Export inspections at only 17 mil. bu. were a MY low and well below expectations, however last week’s inspections were revised up 10 mil. bu. bringing YTD inspections to 155 mil. bu. up 19% from YA, vs. the USDA forecast of up 22%. The USDA also announced the sale of 200k tons (8 mil. bu.) of corn to Mexico. Despite areas of heavy rain last week, harvest progress is expected to remain above their historical averages. AgRural estimates 1st crop corn plantings in Brazil’s center west region to have reached 41%, vs. 46% YA. IKAR raised Russia’s corn production forecast by .4 mmt to 16.4 mmt, vs. the USDA forecast of only 14.6 mmt. Money managers last week bought nearly 47k contracts of corn reducing their short position to 112,691 contracts.
The soybean complex ended up closing higher across the board with beans up $.04 – $6, meal was steady to slightly higher, while oil was up 110 – 150. South American weather remains unsettled with too much rain across Southern Brazil, while both Argentina and WC Brazil remain in a dryer than normal trend thru the end of this week. Key growing areas in Argentina are expected to start seeing better prospects for rain by late this weekend into next week. Improved rainfall for WC Brazil has been pushed back to the closing days of October. Export inspections at 74 mil. bu. were a MY high and well above expectations. In addition last week’s inspections were revised up by 14 mil. bu. bringing YTD inspections to 199 mil. up 15% from YA, vs. the USDA forecast of down 12%. NOPA crush in Sept. at 165.5 mil. bu. was 5 mil. above the average guess, and near the top end of the range of estimates. The NOPA figures suggest total crush for Sept-23 at a record 175 mil. bu. Despite crush coming in above expectations, soybean oil stocks at just over 1.10 bil. lbs. were below expectations of 1.20 bil. lbs and again implies record domestic consumption. Next resistance for Dec-23 bean oil is last week’s high at 56.37, followed by the 100 day MA at 58.12. Spot board crush margins improved $.11 today to $1.87 bu. After falling to a 4 month low last week, soybean oil product value increased .6% to 41.7%. Today’s crush data doesn’t support last week’s speculative driven price plunge. Ag-Rural est. Brazil’s soybean plantings at 17%, below the YA pace of 24%, however in line with the 5-year Ave. Last week MM’s were net sellers across the soybean complex having sold nearly 3k soybeans, 15.4k bean oil, and just over 8.9k bean meal. Their net long position in the soybean complex is down to 60k contracts, a 4 month low.
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