- HEADLINES: Corn recovers again; Soy extends losses despite large exports.
- Chicago futures are mixed, with soy extending overnight losses and corn and wheat near unchanged at midday. The corn market in recent sessions has faced selling early only to be absorbed by end user buying, and there remains a lack of compelling evidence to support a move in either direction nearby.
- Even Black Sea grain flows are viewed as mixed. The corridor has been somewhat successful to date. Russian wheat exports are likely to reach 4.5 million mt in October, which matches the previous year’s total. Ukrainian exports in Oct will be a season high 2.5+ million mt. Turkey’s TMO was able to buy sizeable tonnage of Russian origin at an implied fob price of just over $300/mt, vs. German hi-pro wheat at $340, basis fob. Russian sales and shipments to Turkey in particular have been aggressive and seamless since late summer. (Thank you for brokering the corridor maybe?)
- But we note that some 150 vessels await inspection at Istanbul, which along with a lack of corridor extension guidance leaves vessel owners with some very big decisions to make in the next 1-2 weeks, whether to have vessels in the Black Sea beyond Nov 22.
- More attention is being paid to global corn fob relationships, with livestock markets along the west and southeast coast beginning to calculate the price of importing corn from S America. Brazilian fob corn remains offered some $1.50/bu below quotes at the Gulf and across Southeastern feed terminals. We doubt Brazilian corn pencils in just yet, but this does suggest $7.10-7.20 provides strong fundamental resistance given Brazil’s record surplus. Additionally, Mississippi River levels are unlikely to improve in the near and medium terms. Coming rainfall across the E Plains and SW Midwest is welcomed, but dryness resumes Oct 30-Nov 9. November’s climate outlooks feature near normal temperatures and below normal precipitation in all but the Pacific Northwest. Gulf basis levels stay elevated.
- US export inspections through the week ending Oct 20 included 19 million bu of corn, vs. 18 million the previous week, a meagre 5 million bu of wheat, vs. 9 million the previous week, and a massive 106 million bu of soybeans, vs. 71 million the prior week. Soy inspections were the largest since Nov 2021, and exports from the PNW exceeded those from the Gulf for a second consecutive week. Physical soybean exports will be robust into late autumn amid large existing commitments.
- For their respective crop years to date, the US has shipped 148 million bu of corn, down 22% from last year, 279 million bu of soybeans, down 12%, and 348 million bu of wheat, unchanged from mid-Oct a year ago.
- The midday S American GFS weather forecast is wetter in Southern Brazil and consistent in Argentina. Soaking rainfall of 2-4” forecast in Parana and Mato Grosso do Sul into Oct 31. Needed rainfall of 1-2” will expand southward into the drier areas of RGDS in far southern Brazil. Argentine precipitation coverage will be more scattered, but it remains that soil moisture will be stabilised in key areas of Cordoba, Buenos Aires & Santa Fe.
- Interior US cash markets have performed better than expected amid the need to move supply from the principal Midwest to deficit areas of the Plains and southeast. Soybeans crush margins are incredibly profitable. But rallies will struggle amid timely soy planting in Brazil and as Gulf corn premiums stay at historically high levels.