Written Commentary
The Ghost in the Machine Q4 2023
November 28, 2023
MORNING OUTLOOK
Grains are marginally lower. SN is down 1 cent and near 17.38. SX is near 15.61. SMN is near 416.0. BON is near 81.83. CN is down 1 cent and near 7.63. CZ is near 7.15. WN is down 5 cents and near 10.69. Overnight high was 10.82. KWN is down 3 cents and near 11.51. Overnight high was 11.63. MWN is down 3 cents and near 12.30. Overnight high was 12.37.
US stocks are higher. US Dollar is marginally higher. Crude is unch and near $122. Gold, copper, silver, coffee, cocoa, sugar and cotton are lower. Trade awaiting US jobs report and USDA report.
Rains are forecast for the rest of this week across much of US Midwest with temps cooler than normal. Next week looks warmer and drier. SW France received needed rains. Rest of EU is dry. Canada is wet. E Ukraine and Russia are dry.
Soybeans and soyoil are lower. One analyst said that the global food shortage may be so bad that something will eventually be done to open Ukraine food exports. There were no new China soybean export sales announcement yesterday. Weekly old crop US soybean sales are est near 100-500 mt and new crop 200-700. Demand for US soybean are on the rise and should help futures trade higher. World that Indonesia will allow for 1.0 mmt palmoil exports weighed on Dalian palmoil and soyoil prices. China May soybean imports were 9.7 mmt and down 5 pct from last year. Season to date export pace suggest final exports near 96 mmt vs USDA 92.
Corn futures are lower. Trade is disappointed in lack of reaction to fact there is no agreed plan to open Ukraine food exports. Weekly old crop US corn sales are est near 125-500 mt and new crop 50-600. Demand for US corn exports are on the rise and should help futures trade higher. USDA is not expected to make many changes on Fridays supply and demand report. US cash corn basis remains strong as old crop supplies decline. Some feel USDA needs to increase global feed use than the 4 mmt drop they forecast. Some also feel final South America corn production could be down 8-12 mmt which should also help increase US corn demand.
WN continues to trade in narrow range. US Dollar, stocks and gold has a similar pattern while Crude trend is higher. Russia announced they will restrict grain exports until sanctions are lifted. US HRW harvest should increase especially next week when weather looks warmer and drier. So far, protein is high and quality is good but rains could drop test weight. Weekly US wheat export sales are est near 250-500 mt. World wheat export import trade matrix is a mess. US, Canada and EU supplies may drop which could lower exports. World buyers need to add coverage but prices may not drop to levels they would add coverage. China is paying famers a $450 per tonne bonus to sell wheat into the reserve. Some now doubt their end stocks are 142 mmt or 51 pct of World. North China plains remain dry. Traders continue to be concerned that wheat futures ae not responding positively to talk of lower Russia and Ukraine exports.
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