- HEADLINES: Corn/soybeans sag on slowing US export demand; Wheat rises on HRW wheat conditions and spread unwinding.
- Chicago futures are mixed at midday with wheat futures higher while corn/soybean futures hang in the red. The market appears to be waiting for the USDA Baseline report later today, the US midterm election on Tuesday, the USDA November Crop report on Wednesday, and the US Labor Department report on inflation (CPI) on Thursday. It is a large amount of data to digest and there will be market reactions that follow. Traders are not willing to extend their market risk amid all the headlines that are ahead.
- Chicago brokers estimate that money managers have sold 2,300 contracts of corn and 1,900 contracts of soybeans, while buying 2,400 contracts of wheat. In soy products, funds have sold 3,400 contracts of soymeal while buying 1,200 contracts of soyoil.
- US weekly export inspections were 9.1 million bu of corn and 6.6 million bu of wheat. Both were well under the weekly average needed to reach the USDA annual export estimates. US soybean exports were again solid at 95.2 million bu with China taking 66 million bu or 70% of the total.
- For their respective crop years to date, the US has exported just 175 million bu of corn (down 66 million or 27% vs last year), 361 million bu of wheat (down just 3 million or 1%), and 471 million bu of soybeans (down 51 million or 10%). The US export pace of their combined respected crop years is down 131 million bu or 11%. This is not the way that the US wanted to start the year’s exports.
- The USDA will release its 10 year Baseline report following the Chicago close. The report will offer future forecasts for US demand, supplies and stocks into 2032. We note that the report uses old balance sheets as a starting point (October). But the report will be interesting in terms of measuring renewable diesel demand in future years. Also, will WASDE continue to use trendline corn yields which are 6-7 bushels/acre above last year’s record yield. We see the report as an important starting point to gauge 2023/24 US corn, soybean and wheat balance sheets.
- Traders are awaiting the results of the Egyptian GASC tender. The lowest fob wheat offer for a panamax size vessel was $356.45/mt for Russian wheat. The cheapest CIF offer was for 40,000 mt of Russian wheat at $369.95/mt. We have raised the estimate of costings to $19-20/mt as rising interest rates has made the opening of an LC more expensive. The price ex Novo works back to around $320/mt fob.
- US wheat condition ratings are expected to stay depressed amid the acute drought which batters W KS. Wheat prices are rising on world demand and the lack of rain for the far Western US Plains.
- The S American midday GFS weather forecast is like the overnight run with cool/dry weather for most of the Brazilian and Argentine crop areas for another 3-4 days. Showers and warming temperatures are featured thereafter which will aid crops. Even Argentina has a chance of 1-2” of rain into mid-November which should quicken their spring seeding pace. The extended range forecast offers needed rain for Southern Brazil and most of Central Argentina. Following a few more days of dryness, improving rains should be witnessed.
- Cash soymeal values are weak amid increasing domestic supplies and a slowing US export profile out of the Gulf. And US soyoil export demand is non-existent amid prices that are 19-21 cents premium to S American offers.