• Soybeans follow energy markets higher: Soybeans rallied 25 cents on Friday, with January marking the highest weekly close in 10 weeks. Support came from a strong rally in crude oil prices that lifted December soybean oil to the highest price since early June, a fresh contract high weekly close.

• The Commitment of Traders report showed that funds bought another 26,000 soybean contracts in the week ending November 1. The net long position rose to a 6-week high of just over 101,000 contracts. In soybean meal, funds bought nearly 7,400 contracts for a net long of 93,400 contracts, and in soybean oil, funds bought nearly 4,600 contracts, taking the net long to just over 100,000 contracts, the most since March 2021.

• The GFS weather model has recently proven to be the most accurate for S American weather. The latest forecast projects 1-2” of rain for Argentina and much of Southern Brazil. This will aid growing crops in Brazil and improve conditions for planting in Argentina.

• Without a S American crop problem, the soybean outlook is bearish as the US export pace falls further behind what is needed to meet the USDA forecast. US exports could fall to 1,950 million bu if the pace does not soon quicken, which should top January soybeans at $14.77-14.90. A key USDA report is ahead.

• Chicago corn ends firm on soaring energy prices; market to stay range bound amid return of Ukrainian supply: Dec Chicago corn ended slightly higher, with equilibrium still pegged at $6.75-6.90. In the very near-term the bulls need a downward revision to US yield next week while the bears need a lasting period of Argentine rainfall and a relaxation in energy markets. A neutral trend remains probable into mid-winter.

• Corn at $6.80 is viewed as fairly priced when compared to crude at $85-95. Cash ethanol prices this week have followed crude/gasoline higher. Ethanol in W IA this evening is quoted at $2.51/gallon, vs. $2.36 last week, with spot production margins in the cash market rising amid stagnant corn values. We reiterate that Sep-Dec disappearance is heavily weighted towards domestic consumption, which places greater value on the performance of energy markets into early winter.

• The lack current and future export demand leans bearish Feb onward. Confirmed S American crop loss will be needed to sustain spot Chicago above $6.80 in late winter and spring. Coming Argentine rain boosts soil moisture, with second crop planting to begin in the opening week of December.

• US wheat recovers: EU market ends weak; focus shifts to corridor renewal in mid-November: US wheat futures ended slightly higher on Friday amid a plunge in the US$ and otherwise supportive macro markets. Wheat-specific news is lacking. A neutral trend remains probable as the market reconciles this season’s collapse in Argentine output against very aggressive Russian fob offers, which have been unmoved at $315-325/mt since early October. This compares to Gulf HRW at $425/mt.

• Price action this week demonstrates just how sensitive the market remains to potential changes in Black Sea grain flows. Russia’s decision to resume participation in the export corridor Tuesday was done separately from whether it opts to extend the deal for another 120 days on Nov 18. Odds are high that the deal is renewed but geopolitics is unforecastable. Managed funds in Chicago on Tuesday were short a net 37,000 contracts, vs. 36,000 the previous week, and we estimate fund position Friday at 40-42,000 contracts. There is a risk of coverage based on Black Sea headlines over next weeks.

• Managing risk will stay difficult. Declining world trade is a concern. US winter wheat crop ratings will stay historically low, but autumn conditions correlate poorly with final yields.

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