Ag Market View for Oct 30.23
The soybean complex was mixed today with soybeans down $.10 – $.14, meal was $7 – $16 lower, while oil was within 15 points of unchanged. Bear spreading was noted in beans and meal, with modest bull spreading in soybean oil. Deliveries against Nov-23 beans are expected to be light with only 220 deliverable receipts registered with the exchange. First support for Jan-24 soybeans is at last week’s low at $12.97 ½. In WC areas of Brazil in Mato Grosso, MGDS, and Goias rainfall was erratic and scattered at best with temperatures much above normal. By the upcoming weekend models are suggesting a shift from the recent weather pattern with rains from the south starting to shift north into the drier areas. Forecasts for Argentina continue to move in a more favorable direction. Today the Rosario Grain Exchange stated recent rains and forecast for additional moisture continue to allow Argentina’s cropland to recover from drought conditions. There were no new export announcements today. Export inspections at 70 mil. bu. were in line with expectations and well above the 32 mil. needed per week to reach the USDA export forecast. YTD commitments at 366 mil. bu. are down 3% from YA, vs. the USDA forecast of down 12%. Last week MM’s bought 9,737 contracts of beans, 41,329 contracts of soybean meal, while selling just over 9,200 oil. The MM long position in meal swelled to just over 92k contracts, the largest since April-23. Index funds were also healthy buyers of soybean meal last week having added just over 13k contracts to their long position which now rests at just over 125k contracts, the highest since April-22. After posting healthy gains last week, spot board crush margins slid $.19 today to $2.32 bu. with soybean oil product value gaining 1% to 38%. AgRural estimates Brazil’s soybean crop is 40% planted, just behind the 46% pace from YA.
Prices were down $.02 – $.03 as the 50 day MA at $4.85 continues to put a cap on Dec-23 rally attempts. Near term support held at last week’s low of $4.76 ¾ Heavy rains of 4-12” in Southern Brazil this weekend with prospects for an additional 2-5” this week will lead to localized flooding and the need to replant some corn and soybeans acres. There were no new export announcements today. Export inspections at 21 mil. bu. were in line with expectations however half the 42 mil. needed per week to reach the USDA export forecast. YTD commitments at 195 mil. bu. are up 17% from YA, vs. the USDA forecast of up 22%. Last week, money managers bought 8,440 contracts of corn, reducing their short position to just over 100k contracts. The index fund long position in corn is down to just under 242k contracts, the lowest since Dec-2019. AgRural estimates Brazil’s first corn crop is 53% planted, just behind the 56% pace from YA. Since July, Ukraine has exported 3.6 mmt of corn, compared to 6.8 mmt same period YA.
Prices were mixed today with Chicago down $.06 – $.10, MGEX down $.01 – $.02, while KC rebounded, closing $.01 – $.02 higher after establishing new lows in the overnight trade. A big swing in the Dec-23 KC/Chicago spread closing at $.79 after trading down to $.64 in early trade. The “Humanitarian Corridor” along the western coastline of the Black Sea remains open as 4 vessels left Ukrainian ports last Friday. A Ukraine Railway executive today proclaimed railcar movement toward Odesa ports has increased by 50% over the past week as confidence grows in the viability of the “Humanitarian Corridor.” Tunisia is seeking 100k mt of optional origin soft milling wheat in a tender that closes tomorrow. Export inspections at 7 mil. bu. were below expectations and below the pace needed to reach the USDA export forecast. YTD inspections have reached 261 mil. bu. down 26% from YA, vs. the USDA forecast of down 8%. Since July Ukraine has exported 4.5 mmt of wheat, down slightly from the 4.9 mmt same period YA. Last week MM’s bought just over 12k contracts of Chicago wheat reducing their short position to 92,254 contracts while selling just over 2k contracts of KC wheat, extending their short position to nearly 29k. This is their largest short position in KC wheat since Aug-2020.
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