Written Commentary
Ag Market View for Sept 28.23
September 28, 2023
SOYBEANS
Soybean futures ended higher and supported by higher soyoil prices. Talk of increase demand for biofuel has pushed soyoil futures to highest level since June. Today started with risk off on concern that recession will slow US soybean export demand. Drop in US Miss river levels have forced soybeans back into the country. Talk of lower poultry numbers has collapsed US domestic soymeal basis. Talk of higher US biofuel use is helping soyoil prices. Some feel soybean futures rally may be limited upside unless there is a South America weather problem. Argentina could see rains next week. Weekly US soybean export sales are est at 1,700-2,500 mt vs 724 last week.
CORN
Corn futures ended lower. Slow US export demand offers resistance. Low river navigation has forced corn back into the country. Farmers are no selling and there is a good carry in cash corn prices to encourage farmers to store corn. US Midwest weather should be dry and open for harvest. Argentina corn plantings are behind normal but rains are in the forecast. Weekly ethanol production was up 9 pct from last week but down 7 pct from ly. Stocks are unchanged from last week but up 9 pct from ly. Weekly US corn export sales are est at 250-700 mt vs 200 last week. Russia could control the direction of corn futures. Normal US 2023 weather, trend yield and lack of increase demand for US corn exports could drop CZ23 to 5.50. Talk of record 2023 South America corn supply could limit upside in futures. US feeder cash basis remains strong. Low river water levels has dropped river corn basis.
WHEAT
Wheat futures ended lower. Slow demand for US wheat exports and higher Russian supply offsets dry US and Argentina wheat areas. Trade still looking for new news on if Russia will extend Ukraine export corridor. Some feel latest is the corridor will remain open but no shipments to EU. US wheat export forecast is lowest in 50 years. Weekly US wheat export sales are est at 200-500 mt vs 211 last week. WZ could have a dollar range up or down depending upon fate of Ukraine export corridor and pace of Russia wheat exports. Logistics name of the game with river levels down, barge freight values firm and will remain firm likely though November and maybe into start of 2023. This pushes back crops into interior and firm rail and truck rates which eventually leads to firm cash basis. RR Unions going to approve amendment? If not, just compounds issue and if strike happens in November economy will be hurt for months.
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