Ag Market View for Sept 26.23


The soybean complex finished higher across the board in 2 sided trade as the market continues to witness volatile swings in product trade.  Beans were up $.05 – $.06, meal was $2 – $3 higher, while oil finished 10 – 20 higher.  Oct-23 oil recovered after trading down to a 3 month low in early trade, dipping below the 100 day MA in the process.  Center west regions of Brazil are expected to remain dry for at least the next week.  While the Euro model does offer better prospects for rain in week 2 for Mato Grosso, Goias, and northern MGDS, the GFS model continues to hold much of the moisture in the deep south in RGDS.  Crop conditions slipped 2% to 50% G/E while the CC index slipped to its lowest level of the growing season and is at its lowest level for late Sept. since 2012.  Harvest advanced to 12%, just above the 7% pace from YA and the 5-year Ave. of 11%.  Dr. Michael Cordonnier lowered his soybean yield .5 bpa to 49 with production at 4.05 bil.  Historically Friday’s report has also had a bearish tilt to soybeans with November closing lower 61% of the time since 2000.  In today’s EIA Monthly Energy Review, biodiesel and renewable diesel production rose less than 1% in June-23 to a record 409 mil. gallons.  Production capacity utilization fell to 85% down from 91% in May.  After the close of trade on Friday the EIA will release their monthly capacity and feedstock usage for the month of July.  Recall in June just over 1.2 bil. lbs. of soybean oil was used in the production of biofuels, an annualized pace of 14.4 bil. lbs. well above the USDA forecast of bean oil usage in 2023/24 MY at 12.5 bil. lbs.

chart upswing


Prices were down $.01 – $.02 failing to hold overnight strength.  Dec-23 briefly traded above last week’s high at $4.83 before pulling back.  Rains in the Great Lakes region and eastern corn belt the next few day will slow harvest activities.  Harvest progress will resume in the western and central corn belt in coming days following weekend rains.  The extended outlook however shows a return to above normal precipitation for much of the western corn belt the first week to 10 days of October.  Crop ratings improved 2% to 53% G/E.  Crop ratings suggest an average yield of 173.6 bpa and production of 15.121 bil., just below the Sept-23 USDA forecast.  70% of the crop is mature vs. 55% YA and the 5-year Ave. of 60%.  Harvest advanced to 15%, just below expectations however above the 11% pace from YA and the 5-year Ave. of 13%.  Dr. Michael Cordonnier lowered his corn yield 1.5 bpa to 171.5 with production at 14.93 bil.  Historically Friday’s report has had a bit of a bearish tilt.  Since 2000 December corn prices have closed lower the day of the report 61% of the time.  Weekly ethanol production tomorrow from the EIA is expected to show a modest rebound from last week’s 980 tbd pace as profit margins remain strong.  Last week’s production was a 4 month low.     


Prices are mixed 2 sided trade with Chicago closing steady to $.01 higher while KC and MGEX were down $.02 – $.04.  Tensions in the Black Sea remain elevated as Russia launched another round of drone attacks on grain infrastructure and storage facilities in the port city over Izmail overnight.  1 of the 3 vessels that traveled to Ukrainian ports late last week has been loaded and left, however remains near the port.  The other 2 are still being loaded.  Spring wheat harvest is 96% complete.  Winter wheat plantings have reached 26%, just below YA and the 5-year Ave.  Wire services report that Egypt is seeking up to 1.0 mmt of Russian wheat in private Govt-to-Govt negotiations.  Trade sources also indicate Tunisia has bought at least 100k mt of soft wheat in today’s tender at an average price of $276.85/mt CF.  EU 23/24 soft wheat exports have reached only 6.88 mmt as of Sept 24th, down 27% from YA.  Our Sept. 1 wheat stocks est. at 1.746 bil. is below the ave. guess of 1.770 bil. and the 1.778 bil. YA.  Our all wheat production est. at 1.743 bil. is up 9 mil. from the Sept USDA forecast of 1.734 bil. and roughly 10 mil. above the average guess.  We look for the USDA to raised their winter wheat production forecast in Sept. for the first time 7 years by 11 mil. bu. to 1.238 bil.  Historically Friday’s report has had a bit of a bullish tilt with December wheat closing higher the past 4 years and 55% of the time since 2000.    

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