Prices Turned Mostly Lower

MORNING AG OUTLOOK

Prices have turned mostly lower this AM with most contracts experiencing 2-sided trade.  Wheat prices are holding within this week’s range, not able to mount much upward momentum despite reports of China’s interest in US SRW wheat.  No sales confirmed so far.  There was 1 contract put out for delivery against Nov-26 beans.  Energy prices are higher after Ukraine struck a Russian oil refinery in the Samara region, ending a two-week pause amid pressure from the Trump Admin. to halt this type of operations.  WTI Dec-26 crude oil is up $1.90 per barrel at $103.90 while establishing a new contract high.  Spot RBOB is up $.04 per gallon while HO is $.10 higher.  Isolated patches of heavy rain in the WCB with scattered precipitation in the Great Lakes region the past 24 hours.  Scattered rains across the central and southern Midwest this weekend before widespread shower activity blankets the nation’s midsection through the middle of next week.  Above normal temperatures look to hold across the Midwest in the first half of Nov. with dryer conditions across the N. Midwest in week 2 of the outlook.  Scattered rains and above normal temperatures will benefit plantings in Argentina over the next week.  In Brazil rains will favor the interior south with scattered rains in the WC region.  The US $$ is sharply lower, falling to new lows for the week.  US stock indices range from steady in the DJIA to down 2.4% for the Nasdaq.

Corn: 

Dec-26 is $.02 lower at $4.49 ¼ while holding within yesterday’s range as prices continue to consolidate around $4.50.  Speculative traders were net buyers of 6k contracts yesterday, while open interest jumped another 9k contracts.  To date US exports are down 34% YOY vs. the USDA forecast of down only 4%.  The BAGE reports Argentine corn plantings have reached 47%, well ahead of the average pace in the low 30’s.  Bulls hope US corn will be next on China’s wish list however the path of least resistance remains lower until US demand improves and/or a more threatening SA forecast.

Soybeans: 

Jan-27 beans are $.03 lower at $12.32, Dec-26 meal is down $2.80 at $326.50 while Dec-26 oil is up 42 points at 66.04.  Meal dipped to a fresh 2-month low while yesterday spot oil rejected trade into 6-month lows.  Despite net selling yesterday, we have the MM’s net long position across the complex at 445k contracts, still historically large however off from the recent record of 558k.  Soybean O.I. was down 9k contracts, meal was off 8.7k while oil was up 9k.  Crush margins are steady at $2.27 bu. while bean oil PV is back above 50%.  I estimate Chinese purchases at 18.5 mmt.  Sinograin is expected to auction off another 400k mt of soybeans next Tues. Nov. 3^rd.  Their last auction earlier this week sold only 172k mt, roughly a third of the total volume offered.  The BAGE reports Argentine plantings are underway with just over 2% of the crop seeded.

Wheat: 

Prices have turned lower in 2-sided trade overnight.  CGO Dec-26 is down $.01 ½ at $6.02 ¼, Dec-26 KC is $.03 lower at $6.42 ¼ while Dec-26 MIAX is $.00 ½ lower at $6.24.  Despite this week’s export sales being a MY high, YTD commitments are still off 29% YOY vs. the USDA forecast of down 17%.  While 2 vessels have traveled safely through the Kerch Strait another vessel was sunk in the Black Sea off the coast of Bulgaria.  Only time will tell whether a recent cease-fire agreement in the Kherson region will hold (or expand) or whether vessels can safely navigate through the Black Sea.  Prospects for peace have pressured prices the past 2 months.

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