Written Commentary
SOYBEANS
The soybean complex was mixed with beans up $.08 – $.10, meal was $7 – $10 higher, while oil was down 35 – 55. Nov-23 traded above the $13 for the first time this month before settling just below it. Next resistance is the 100 day MA at $13.06 ¾. We also saw a reversal of yesterday’s oil/meal spreading. Dec-23 meal traded above $400 ton for the first time in a month. Dec-23 oil found support just above the $.55 level. Spot board crush margins rebounded another $.05 today to $1.87 bu. a 5 week high. Rains in WC Brazil are likely to be minimal for at least another week which combined with the heat will likely require some crops to be replanted after failing to germinate. Areas along the Amazon River basin have fallen to their lowest levels in over a century to due to drought conditions. Bean conditions improved 1% to 52% G/E, slightly above expectations. Harvest advanced 19% to 62% complete, vs. 60% YA and the 5-year Ave. of 52%. EU soybean imports since July 1st have reached 3.16 mmt, while meal imports are at 4.43 mmt, both are slightly below YA levels. ABIOVE forecast Brazil’s 23/24 soybean crop at 164.7 mmt, just above the USDA forecast of 163 mmt. They est. exports will reach 100 mmt and crush 54 mmt, vs. the USDA forecasts of 97.5 mmt and 55.75 mmt respectively. Bean oil usage for biofuel production has already reached nearly 10.1 bil. lbs for the 22/23 MY with 2 months of data remaining. The last 3 months have featured record usage. If you annualized the past 3 months average it comes to nearly 14.5 bil. lbs over a 12 month time frame, vs. the USDA forecast of only 12.8 bil. lbs. for the 2023/24 MY. The next update from the EIA for biodiesel and renewable biodiesel capacity is Oct. 26th. Next monthly bean oil usage data is Oct. 31st. S&P Global estimates bean acres in 2024 will rise 2.4 mil. from 2023 to 86 mil.
WHEAT
Prices closed lower across the board with KC and MGEX $.01 – $.03 lower, while Chicago was down $.04 – $.07. MGEX Dec-23 made a new monthly high before setting back. As of Oct. 16th Ukraine has planted just over 3 mil. HA of winter wheat, or 69% of the intended acreage. US winter wheat plantings have reached 68%, in line with YA and the 5-year Ave. SovEcon lowered their Russian wheat production forecast .2 mmt to 91.4 mmt, still well above the USDA forecast of 85 mmt. EU soft wheat exports since July 1st have reached 8.81 mmt, down 22% from YA. Domestic wheat prices in India have reached an 8 month high fueled by anticipated strong demand and limited supplies. With the high prices ahead of general elections some speculate the Govt. may release additional reserves or lower their import duties to drive down prices. S&P Global look for all wheat acres to fall 875k in 2024 to 48.7 mil. Winter wheat acres are expected to see the biggest drop 700k fewer acres.
CORN
Prices were $.01 – $.02 lower as early strength failed to hold. Dec-23 remains stuck between $4.70 – $5.00. US harvest conditions will be mostly favorable over the next week with limited interruptions. Extreme heat of 100–110 degree temperatures continue to impact many growing regions in SA including NE Argentina, Paraguay and WC Brazil. Prospects for beneficial rains in Argentina are on the rise beginning this weekend and again the middle of next week. US corn conditions held steady at 53% G/E as expected. Harvest advanced only 11% to 45% complete, just above YA and the 5-year Ave., however slightly below expectations. Safras & Mercado estimate Brazil’s 1st corn crop is 59% planted, vs. 53% YA and the 5-year Ave. of 53%. EU corn imports for 23/24 since July 1st have reached 5.1 mmt, down 39% from YA. Constanta port officials in Romania state that 10.5 mmt of Ukrainian grain has been shipped thru their port so far in 2023, which represents 42% of the total grain shipments. S&P Global estimates corn acres in 2024 will fall nearly 2.4 mil. from 2023 to 92.5 mil. Ethanol production is expected to remain over the 1.0 mil. barrel per day pace for the 4th consecutive week. The EIA data will be released tomorrow at 9:30 CST with the range of est. running 1.0 mbd to 1.02 mbd.
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