- HEADLINES: Soybeans rally with the sharp recovery in crude oil on OPEC talk of a cut; Argentine farmers step up cash soybean sales. Midday S American weather unchanged.
- Chicago values are mixed at midday with soybean futures rallying on the recovery of soyoil ahead of first notice day against December futures and news that OPEC will cut production to hold crude oil prices. Soybeans followed soyoil upwards with Midwest cash crush margins holding at historically high levels.
- Wheat/corn values are weaker on slow US export demand. The spot Chicago wheat/corn spread narrowed to $0.87 before stabilising. In the Plains, wheat is trading at discounts of $0.30-0.50 vs. KC futures while corn basis is firm at $0.60-1.35 over. The cash spread has narrowed to its tightest level of the year, but it is still not enough to allow HRW wheat feeding by feedlots. However, US HRW wheat cannot allow itself to be fed in cattle rations on tight supplies and new crop condition woes. Wheat futures should stabilise just shy of the July lows at $7.30-7.50 spot futures. December Chicago wheat futures fell to $7.5025 this morning.
- Chicago brokers estimate that funds have are flat in corn while selling 4,900 contracts of wheat and buying 4,900 contracts of soybeans. In the products, funds have bought 3,100 contracts of soyoil and 4,800 contracts of soymeal. The move higher in soybeans came after the recovery in crude oil futures as OPEC commented that they may cut production (again) in their December meeting.
- US export inspections for the week ending November 24 were 11.9 million bu of corn, 74.3 million bu of soybeans, and 7.3 million bu of wheat. The corn/wheat export paces were disappointing while soybeans came in better than expected at 74.3 million bu. For their respective crop years to date, the US has shipped out 229 million bu of corn (down 111 million or 33%), 385 million bu of wheat (down 15 million or 4%), and 707 million bu of soybeans (down 79 million or 10%). All US grains exports for their crop years are down 232 million bu (when compared to last year) or 5.9 million mt. However, it is the US export pace of the grains that is disappointing.
- January soybean futures have pushed above the 200-day moving average for the first time since early November at $14.485. The push above $14.50 triggered a round of fund buying. January soybeans would have to close above $14.75 to turn the charts bullish in a breakout of the range.
- Argentine farmers are estimated to have sold 350-400,000 mt of stored soybeans on the new dollar soybean offer of 230 pesos this morning. The sales pace is slower than crushers/exporters had hoped for. Farm selling is measured so far on the new program offer.
- The S American forecast is little changed and consistent. Northern and Central Brazil will have a daily chance of rain for the next 10 days with accumulations of 3-6.50”. RGDS/Argentina will be dry nearby with a weak frontal pass producing 0.15-1.00” of rain in the last half of the week. The extended range forecast offers another 5-6 days of dry weather a new frontal pass for December 10-12. Episodes of heat will impact Argentina with highs in the 90’s and lower 100’s. Argentina will need a return of soaking rains by mid-December. Brazilian high temperatures hold in the 80’s/90’s.
- There are no resting orders above or below Chicago which exacerbates daily price moves. The news that OPEC may cut production rallied crude oil and caused a flurry of short covering across Chicago. Soyoil/soybeans paced the rally. Corn is trying to follow soy, but the weight of wheat is capping gains near last week’s high at $6.72-6.74 March. WASDE is expected to trim their 2022/23 US corn export estimate by 100-200 million bu allowing for enlarged US corn end stocks in the December 9 report. Russian wheat values seem unlikely to decline but their corn offers are cheap with no export tax.