Written Commentary
CORN
Prices are $.02 – $.03 higher at midday as Dec-23 clings to the upper end of the its $4.70 – $5.00 range. China’s economy grew by 1.3% in the 3rd quarter and was up 4.9% from YA, better than the 4.5% expected, however down from the 6.3% YOY after the 2nd Qtr. With Russian Pres. Putin in China this week visiting Chinese leader Xi, a Russian grain export company, EPT, signed a 12 year contract with a Chinese firm Chengtong, to supply 70 mmt of grain and oilseeds. China’s corn imports from Sept-23 reached 1.65 mmt, up 7.3% from Sept-22, however YTD imports at 16.6 mmt are down 10% from 2022. Ukraine’s corn exports since July 1st have totaled 3 mmt. Only minor harvest delays are expected across the US eastern corn belt as light showers are forecast for the next few days. Nearly the entire western corn belt will see favorable harvest conditions into early next week. US ethanol production jumped to 1,035 tbd last week, at the high end of expectations, and above the pace needed to reach the USDA corn usage forecast of 5.30 bil. bu. Ethanol stocks slumped to 21.1 tb, the lowest since Dec-21. Gasoline usage jumped another 3% last week and was up 4% from same week YA. Brazil’s corn exports are expected to reach 8.5 mmt in Oct-23, down from the earlier forecast of 9.2 mmt. Export sales tomorrow are expected to range from 20 – 42 mil. bu.
SOYBEANS
The soybean complex was mixed with beans up $.09 – $.14, meal $8 – $14 higher, while oil was down 50 – 60. Nov-23 made a new highs late in today’s trade nearly reaching resistance at its 100 day MA at $13.15 ¾. Bull spreading was noted across the soybean complex. Dec-23 meal surged to its highest level in nearly 2 months. Next resistance is the Aug-23 high at $421. Dec-23 oil pulled backed closing just below a 50% Fibonacci retracement level at $.55. Better prospects for rain across key growing areas in Argentina start this weekend. Still too hot/dry in WC Brazil for at least another week, while southern states of RGDS, Santa Catarina, and Parana remain stuck in an overly wet pattern. The extreme heat and dryness in Mato Grosso, MGDS and Goias will continue to delay soybean plantings and increase the need to replant failed crops. This will also push back the 2nd corn crop plantings in Jan/Feb. The USDA did announced the sale of 132k tons (5 mil. bu.) of soybeans to China. Brazil’s soybean exports are expected to reach 6.4 mmt in Oct-23, down from the earlier est. of 6.8 mmt. The USDA has acknowledged they will permanently incorporate FSA survey and satellite acreage data into their August crop reports for corn, soybeans and wheat. Spot board crush margins increased another $.12 today to $2.03 bu., with soybean meal product value jumping to just over 60%, a 5 month high.
WHEAT
Prices were higher across the board today with Chicago $.06 – $.09 higher, while KC and MGEX were up $.03 – $.06. Prices seem well supported above recent lows on fears of further global production cuts and tighter global stocks. Next resistance for Dec-23 Chicago is the 50 day MA at $5.95 ½. A total of 34 vessels have arrived in Ukrainian ports since Sept. 6th utilizing the “Humanitarian Corridor” with 20 of them exporting agricultural products. Since July 1st Ukraine’s grain exports have reached 7.8 mmt, down 32% from YA. Wheat exports accounted for 4 mmt. Chinese customs data showed Sept-23 imports totaled 660k tons, up 66% from YA. YTD imports have reached 10.2 mmt, up 54% from YA. India’s Govt. has agreed to pay domestic wheat growers a 7% increase for new crop supplies in an effort to stimulate additional acres. South Korea reportedly bought 60k mt of optional origin wheat for $272/mt CF for Jan-24 shipment.
See more market commentary here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2024 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
