Written Commentary
Ag Market View for Sept 28.23
September 28, 2023
SOYBEANS
Good US weekly export sales may have offered support to soybean futures. Jan soybean remains also in a broad 13.60-14.25 trading range. Weekly US export sales were near the high end of estimates. Argentina needs a good rain. Central Brazil is dry with key is if rains return after colder than normal temps. Weekly US soybean export sales were near 38 mil bu. Total commit is 1,159 vs 1,107 ly. USDA goal is 2,045 versus 2,158 ly. Some could see exports closer to 1,900 if China demand slows and SA has record 2023 crop. Fact China lockdown in 28 cites, 200 million people and 25 pct of GDP could slow their raw material imports. High processing margins and higher energy markets offers support. Slower US export demand and talk of higher 2023 global supplies offers resistance.
CORN
Dec corn remains in the 6.70-7.00 trading range. Weekly US export sales were below trade estimates. While there are no Ukraine export prices, Brazil and Argentine are still below US. Weekly US corn export sales were 10 mil bu. Total commit is near only 554 mil bu vs 1,172 ly. USDA goal is 2,150 vs 2,471 last year. Sales are a good 20 mi bu below pace needed to reach USDA goal. Some could see final exports closer to 2,000 mil bu. Weekly US ethanol production was up from last week with stocks higher than last year. Funds continue to be reluctant buyers of corn futures on fears recession and normal World 2023 crops will weigh on corn futures. Feeder and ethanol basis remain strong. River basis remains weak. Higher US Dollar offered resistance to corn futures. There remains great uncertainty over Ukraine export corridor deal. The deal will expire Nov 19. Large corn call option open interest suggest trade looks for deal to end. Vessel owners may not send vessels into Ukraine for loading in 10 days in fear they would not get out if deal is not extended. Brazil corn exports remain aggressive sellers of corn. Argentina is dry.
WHEAT
Dec Chicago wheat had a 25 cents range. Volatility could be the name of the game until more is known about Ukraine export corridor. Deal expires Nov 19. Some feel Russia could reveal their decision at G 20 meeting Nov 15. Weekly US wheat export sales were 19 mil bu and better than est. Total commit is near 434 vs 463 ly. Most of the new sales were white winter. USDA goal is 775 mil bu vs 800 last year. Matif rose on reports that Argentine exporters would not oppose export restrictions for 3 months due to lower production but it closed off session high as the US reversed gains of almost 20¢ to losses of 10¢. With reports that the Ukraine export corridor may be closed suggested no apparent reason for the late Matif decline. There was nothing new Black Sea as market awaits news from Moscow on status of Ukraine export corridor. US plains are too dry. Argentina is too dry. E Australia is too wet.
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