Written Commentary
The Ghost in the Machine Q4 2024
November 15, 2024
MORNING AG OUTLOOK
Grains are lower. US stocks are sharply higher. US Dollar is also sharply higher and at 4 month high. Crude is lower. Red victory could increase US production and lower prices. Fed meeting next. USDA November report Monday. GSI commodity index is lower.
SOYBEANS
SF is near 9.84. Red victory is expected to increase tariffs on China and Mexico. Global vegoil markets are seeing some consolidation. Nearby China demand for US soybeans has been supportive. But now, new crop Brazil soybean values higher on talk China is expected to shift demand from US to Brazil. Fact 2025 South America soybean crop could be 20 mmt higher than last year should provide pressure to futures February forward. Trade est US 2024 soybean crop at 4,557 mil bu vs USDA Oct est of 4,582. Trade est 2024/25 carryout at 532 vs USDA 550.
CORN
CZ is near 4.15. Some look for nearby corn futures in a range from 3.90-4.35. USDA announced 124 mt US corn to unknown. US election will add to uncertainty to US Ag domestic and foreign policy. Trade est US 2024 corn crop at 15,189 mil bu vs USDA Oct est of 15,203. Trade est 2024/25 carryout at 1,946 vs USDA 1,999. US ethanol margins up with corn and prices lower and ethanol prices at 2 month high. Brazil corn export pace is slow and suggest exports could be down 10 mmt vs USDA 46.5. Some feel final Argentina corn acres could be higher than USDA est.
WHEAT
WZ is near 5.65. KWZ is near 5.71. MWZ is near 6.05. Some look for nearby Chicago wheat futures in a range from 5.50-6.20. USDA rated US winter crop 42 pct G/E vs 38 last week and 50 ly. Since, good rains are fallen across US HRW plains. Trade est 2024/25 carryout at 532 vs USDA 550. Normal 2025 north hemisphere wheat crops could offer long term resistance. Matif wheat futures continue to slip lower on better EU weather and bearish tech selling. Managed funds are short futures.
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