Ag Market View for Oct 25.22

SOYBEANS

Soybeans turned higher today on little new news. Some liquidation of short soybean long grain spreads may be helping soybean futures today. Open interest continues to decline. For some that could be an indication of market may be looking for a lower price move. US soybean basis is also the tail of two markets. Interior basis are firm to crushers with record margins. River basis levels are down due to low water levels. US exports are behind last year. Key is SA weather and China demand.

CORN

Corn futures ended higher. Open interest continues to rise. For some that could be an indication of market may be looking for a higher prices move. US corn basis is the tail of two markets. Interior basis are firm to feeders and crushers as they need corn. Some say current domestic corn stocks are 1 bil bu below last year. River basis levels are down due to low water levels. US exports are well behind last year. Still some estimate that Ukraine could still export 3 mmt of grain each month to Europe by rail. Some could see less farmer selling as harvest nears end. Some feel US final exports could drop below USDA estimate. This could be somewhat offset by higher feed and residual. Ethanol US outlook mixed. US summer travel may be over. Gas prices have come down but inflation is cutting into consumer disposable income. Trade looking for higher US 2023 aces, Higher trend yield and higher US/World 2023/24 end stocks.

Hightower Chart on Soybean Exports
Hightower Chart on corn exports
Hightower chart on All Wheat exports

WHEAT

Wheat futures ended lower. Open interest continues to rise. For some that could be an indication of market may be looking for a higher prices move. US wheat export prices are too much of a premium especially versus Russia. Some note that Chicago wheat call option open interest remains high. Possibly a hedge against Russia closing Ukraine export corridor. Still some estimate that Ukraine could still export 3 mmt of grain each month to Europe by rail. Matif wheat was lower. EU wheat continues to struggle with big discounts to Russian wheat. The Black Sea is still a political and logistical mess which does not allow any kind of reasoned market or risk analysis.

See more market commentary here.

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