Written Commentary
SOYBEANS
The soybean complex was mostly lower with beans down $.12-$.16, meal was mixed with spot contracts down $1 – $3 with deferred contracts up a few dollars, while oil was 125-145 lower. Bear spreading was noted in beans and meal. Dec-23 meal made a new 4 month high before pulling back. Next resistance is the June high at $432.60. Dec-23 oil fell to a 4 month low drawing spillover weakness from lower energy prices. Next support is at 51.36. Rain did fall in key growing areas of Argentina over the weekend however much more is needed. Excessive heat with highs ranging from 100 – 111 Fahrenheit continued to impact Northern Argentina and WC Brazil over the weekend. Gradual improvement is seen by late this week as scattered showers are expected to develop, however still no widespread soaking rain events are expected. Another round of heavy rains are expected across Southern Brazil by late this week with localized flooding possible. AgRural estimates Brazilian soybean plantings have reached 30% as of Oct. 19th, down from 34% YA. Plantings in Mato Grasso have reached 60%, below the 67% pace from YA, however above the 5-year Ave. of 51%. Last week MM’s were net sellers of just over 4k contracts of soybeans, just over 5k contracts of oil, while being net buyers of 18,639 contracts of soybean meal. The MM’s are now holding a net short position in soybeans for the first time since April-2020. Export inspections at just over 90 mil. bu. were the highest in nearly a year. YTD inspections at 290 mil. bu. are up 3% over YA, vs. the USDA forecast of down 12%.
CORN
Futures were $.04 – $.05 lower with prices closing on their lows. Resistance for Dec-23 comes in at its 100 day MA of $5.09, with support at the 50 day MA at $4.85 ½. Heavy rains are expected over the central Midwest over the course of the next week. Harvest delays are likely for MO, IA, IL and WI. APK Inform lowered their Ukrainian grain production forecast .8 mt to 53.4 mmt. Their corn production est. is 24.8 mmt, well below the USDA forecast of 28 mmt. Despite the lower production APK increased their grain export forecast 500k mt to 34.7 mmt, which includes 19 mmt of corn, very near the USDA est. of 19.5 mmt. SovEcon estimates Russia grain exports will reach 4.8 mmt in Oct-23, down from 5.9 mmt in Sept. Ukraine is looking to expand use of the “Humanitarian Corridor” for agricultural exports hoping to reach export capacity of 2.5 mmt per month, nearly the volume they were able to reach with the BSGI. Since July 1st Ukraine’s Ag. exports have reached only 8 mmt, down 30% from YA. Corn exports at 3.2 mmt are down 49%. US corn inspections at 17 mil. bu. were a new MY low. Last week Money managers bought nearly 4k contracts of corn, reducing their short position to just under 109k contracts.
WHEAT
Prices managed to close slightly higher, although well off session highs. Both KC and Chicago finished steady to $.02 higher while MGEX was up $.03 – $.07. Rumors that China was showing additional interest in US wheat was the main supportive feature. APK Inform is estimating Ukraine’s wheat harvest at 21.5 mmt, with exports reaching 13 mmt. This compares to the USDA forecasts of 22.5 mmt in production and exports at only 11 mmt. Ukraine’s Ag. Ministry reports wheat exports have reached 4.1 mmt since July, down 6.7% from YA. Last week MM’s were lite sellers in both KC and Chicago wheat. Their short position in KC expanded to nearly 27k contracts, the largest since Aug-2020. Export inspections at 6 mil. bu. were a new MY low. YTD inspections have reached 254 mil. bu. down 27% from YA, vs. the USDA forecast of down 8%.
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