Written Commentary
Ag Market View for Nov 28.23
November 28, 2023
SOYBEANS
Soybeans found support from strong domestic crush basis and increase in demand for US soybeans. Higher US equities may have also offered support. Some feel that talk US Central Bank could slow rate increases has triggered managed money to liquidate equity shorts. USDA announced 126 mt US soybeans sold to China and 198 mt sold to Spain. At the same time, China announced they will sell 500 mt soybeans from reserves. Key could be final US soybean crop size and SA weather. September China soybean imports increase from August. Oct-Sep imports were 91.6 mmt vs USDA 90.0. Some feel fact China has locked down 28 cities, 200 million people and 25 pct of GDP that feed use may decline and China 2022/23 imports might not reach USDA 98.0 estimate. Oil World est World 2022/23 soybean crop at 390.2 mmt vs 355.9 this past year. Crush at 324.5 vs 318.6. End stocks near record 103.1 mmt vs 89.1.
CORN
Dec corn remains in the 6.70-7.00 trading range. Weekly US export sales continue below levels to reach USDA goal. While there are no Ukraine export prices, Brazil and Argentine are still below US. US corn export commit is near only 554 mil bu vs 1,172 ly. USDA goal is 2,150 vs 2,471 lt. Some could see final exports closer to 2,000 mil bu. Funds continue to be reluctant buyers of corn futures on fears recession and normal World 2023 crops will weigh on corn futures. Feeder and ethanal basis remain strong. Cash ethanol production margins are up slightly. There remains concern that actual driving miles may slow which could increase ethanol stocks. River basis remains weak. Record low Miss river water levels is increasing barge freight and pushing domestic rail and truck freight higher. US farmers are reluctant sellers of corn in this tax year. There is talk that they will Increase 2023 corn acres. Trend yield could increase US 2023/24 corn carryout closer to 2,000 mi bu. USDA could drop US corn exports 100 mil bu in November slow demand for US corn exports and lower Brazil prices limits the upside. Key will be if Argentina and Brazil sees normal 2023 weather once La Nina declines. Trade will also be watching for any headlines on the outcome of Ukraine export corridor.
WHEAT
Wheat futures ended lower led by Chicago and KC. Drop in most commodity prices may have weighed on wheat. Slow demand for US wheat exports may also be forcing managed money to increase wheat shorts. WZ ended below all moving averages and is near what some supply watchers feel is support. Ukraine export corridor deal expires Nov 19. Some feel Russia could reveal their decision at G20 meeting Nov 15. US wheat export total commit is near 434 vs 463 ly. USDA goal is 775 mil bu vs 800 last year. US continues to lose wheat export share especially to Russia. Dry Argentina, dry US plains and wet S/E Australia raises concern about US 2023 HRW and south hemisphere wheat crop supplies.
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