Ag Market View for Oct 23.23
Prices closed $.05 – $.10 lower today, making lows near the close. Spreads also gave back a large portion of yesterday’s rally. Earlier strength in Dec-23 stalled right at its 100 day MA at $5.09 ½. This was the highest trade in 2 ½ months. Corn open interest yesterday shot up just over 47k contracts suggesting new money coming into the market, not just a short covering rally from speculative traders. Brief harvest delays are expected this weekend in the eastern corn belt. The WCB will see good harvest conditions into early next week before widespread moisture moves northeast from the southern plains into the central Midwest by middle part of next week. As of today, Ukraine’s grain and oilseed harvest has reached 57.6 mmt, which includes 9.3 mmt of corn and 5.9 mmt of barley. The BAGE estimates Argentina’s corn plantings advanced less than 1% last week to 20% complete. They kept their acreage forecast unchanged at 7.3 mil. HA. US corn area in drought fell 9% last week to 50%, the lowest in 6 weeks.
The soybean complex was mostly lower with beans down $.06-$.13, bear spreading noted, meal was mixed from up $1 in spot Dec-23 to down $3, while oil has steady to 30 higher in spot Dec-23. Nov-23 beans made a new monthly high overnight, stalling right at its 100 day MA at $13.18 ½ for the 2nd consecutive session. Spot board crush margins surged $.19 to $2.18 bu. a 4 week high. Markets seem to be placing a great deal of confidence in the extended forecasts. Hot, dry conditions will continue in WC Brazil into early next week, however the last week of Oct. does offer better prospects for scattered showers. After a brief pause another round of heavy rains are expected over southern Brazil by the middle of next week into the following weekend. Rains over key growing areas of Argentina are expected over the next week to 10 days. Soybean OI was down just over 14k contracts yesterday, largely due to liquidation of the Nov-23 contract. OI increased in the products with meal up just over 1,500 contracts while oil surged nearly 9,200 contracts. Ukraine’s oilseed harvest has reached 18.4 mmt with 10.2 mmt of sunflower seed, 4 mmt of rapeseed and just under 4 mmt of soybeans. Chinese customs data showed they imported 7.15 mmt of soybeans in Sept. down 7% from Sept-22. Just over 96% of the imports were from Brazil. Dreyfus announced plans to begin construction of a soybean crushing plant in Ohio early in 2024. The facility will be able to process over 150k tons annually. US soybean area in drought fell 5% last week to 53%.
Prices in all 3 classes closed lower today, unable to hold early strength. All classes were down $.04 – $.08 with bear spreading noted, particularly in Chicago. Dec-23 Chicago traded above its 50 day MA resistance for the first time in nearly 3 months. Next resistance is the Sept-23 high at $6.15 ½. MGEX Dec-23 has also traded to a new monthly high. Ukraine’s wheat harvest has reached 22.4 mmt. Australian wheat production est. are starting to rise following rains in eastern portions of the island nation earlier in Oct-23. Recent guesses range from 26-28 mmt, above the Oct-23 USDA forecast of 24.5 mmt, which was down 1.5 mmt from Sept-23. The BAGE reports wheat conditions continue to deteriorate with 47% of the crop rated poor or very poor, up 5% from the previous week. 48% of both spring and winter wheat areas are in drought down 3% and 1% respectively from the previous week.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.