Ag Market View for Sep 23
Soybeans traded higher. Some buying linked to higher energy prices and lower US Dollar. Weekly Export sales were below pace needed to reach USDA goal and China import goal. There is talk that EPA may announce cuts in 2020,2021, 2022 biofuel blending obligations soon. This offset industry talk that increase soyoil use for biofuel could increase need for more US soybean acres. Brazil is dry. Light Brazil rains next week. Argentina drier. SX support 12.70. Resistance 12.90. Soybean open interest only 664,000 contracts vs high in 2020 of 1,050,000. Weekly US soybean export sales were 903 mt. Total commit 23.2 vs 35.4 ly. USDA goal 56.9. China US soybean export commit is near 11.0 mmt with 7.3 in unknown. China took 35 mmt last year. China announced they will place control measures on hog breeding herd at 41 million 2021-2025. US Sep 1 hog inventory estimated near 98 pct.
Corn managed to end higher despite low US weekly export sales. Higher energy prices and talk ethanol is cheap vs alternative energies offered support. Crude is higher on talk of lower supplies and higher demand. Forecast of cold US winter supportive. Oat futures are sharply higher again on concern over lower Canada supply vs US increasing demand. There is talk that EPA may announce cuts in 2020,2021, 2022 biofuel blending obligations soon. US cool and dry. Next week warm and dry. Brazil is dry. Light Brazil rains next week. Argentina drier. Ukraine is dry. CZ support 5.20. Resistance 5.37. Corn open interest only 1,382,000 contract vs 2021 high near 1,978,000. Cash US corn domestic basis firm to sharply higher as 2021 supplies drop. Weekly US corn export sales were only 373 mt. Total commit 24.9 vs 22.5 ly. USDA goal 62.8. China US corn export commit is near 11.9 mmt with 2.4 in unknown. China took 23 mmt last year. Informa est US 2022 corn acres 94.3 vs 93.7 ly, sorghum 6.7 vs 7.5, Double crop 4.5 vs 3.9. Informa est CRP 20.7 vs 20.7. Total all crops 336.0 vs 335.1 ly. US Sep 1 hog inventory estimated near 98 pct, Cattle on feed estimated also near 98 pct. There is talk that large increase in Brazil and Russia cattle herd suggest US inventory may need to drop.
Wheat futures traded higher. Talk of increase in World export trade needs at a time when exports supplies are down and milling wheat supplies are especially lower than normal triggered new buying. There were also rumored that China may have bought a few cargoes of US SRW. US cool and dry. Some showers in US SW Plain next weeks. EU is dry. Russia has seen some rains. WZ support 7.00. Resistance 7.33. Chicago wheat open interest 354,000 contracts vs 2020 high near 527,000. Weekly US wheat export sales were 356 mt. Total commit 10.8 vs 13.4 ly. USDA goal is 23.8. Mexico is largest buyer to date at 1.8 mmt, Philippines 1.6 mmt, Nigeria 1.1 mmt, China 846 mt. Informa est US 2022 wheat acres at 48.5 vs 47.0 last year, Double crop 4.5 vs 3.9.,CRP 20.7 vs 20.7 with total all crops 336.0 vs 335.1 ly. Higher labor, energy, raw material cost and uncertain food demand reducing food companies income. Reports that food companies may begin to pass on higher cost to consumer.
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