- HEADLINES: US weekly export sales offer support; Argentine soy dollar news by Tuesday. December options to expire.
- Chicago values are mixed to mostly higher at midday. Early Chicago weakness uncovered option related futures buying which ignited an early session rally. Corn was the upside price leader with March getting closer to key chart resistance at $6.75-6.85. January soybean futures also tested resistance at $14.50 while US wheat futures tried to break out of a downtrend.
- The volume of trade has been holiday reduced with brokers reporting that the activity is related to the expiration of December options. World cash grain markets are showing limited change with traders ready to cut risk ahead of the end of the year.
- We look for a mixed to mostly higher Chicago close. If seasonal trends hold, we expect a selling opportunity to develop early next week. Chicago values tend to seasonally rally during the Thanksgiving week which is followed by selling of cash corn/soybeans by US/S American farmers during December.
- Chicago brokers estimate that funds have bought 3,900 contracts of corn, 1,700 contracts of soybeans, and 1,200 contracts of wheat. In the products, funds have sold 1,100 contracts of soyoil while buying 2,100 contracts of soymeal.
- Rumours persist that the Argentine Government offering up its soybean dollar (green Peso) program for cash soybean sales either this weekend or on Monday. The Peso rate vs. the US$ has yet to be announced, but it could be as much as 10% above the current levels to spur farm sales. The Argentine Government financially prodded farmers to sell nearly 5.0 million mt of soybeans back in September. That was before planting when farmers needed cash (Pesos) for inputs. This December program will be less successful with sale estimates ranging from 1.5-3.0 million mt. The sales will boost Argentine soybean exports over the next 45 days.
- US weekly export sales for the date ending November 17 were 18.8 million bu of wheat, 72.8 million bu of corn, and 25.4 million bu of soybeans. The grain sales were larger than expected while soybean sales were at expectations.
- For their respective crop years to date, the US has sold 488 million bu of wheat (down 35 million or 7%), 699 million bu of corn (down 655 million or 48%), with US soybean sales at 1,345 million bu (up 18 million from last year or 1.3%). Traders will be positioning for WASDE to lower US 2022/23 corn exports in their December report since the Ukraine Export Corridor will be open for another 120 days. We look for WASDE to cut old crop corn exports by 50-100 million bu and raise end stocks accordingly. Additional cuts are anticipated in 2023.
- The S American weather forecast is little changed and consistent with prior runs. Northern and Central Brazil has a daily chance of rain for the next 10 days with rainfall totals of 3-6.00”. Southern Brazil and Argentina are dry for the next 5-6 days before showers briefly return. Initial rainfall totals look to range from 0.25-1.00”. The extended range offers another slot of 4-5 days of below normal rainfall. Episodes of heat look to impact Argentina with highs in the 90’s with a few lower 100’s across W Cordoba. Argentina will be needing improved rainfall during December.
- Brazil is on its way to a record large soy harvest amid the recent/coming rain. Argentina is the question mark, but with the bulk of the corn and soy crops yet to be planted, it is late December-March weather which has the biggest impact on yield. The nearby dry Argentine weather could spark a test of key resistance in corn at $6.75-6.85 March. We would see any Argentine weather-related rally as a selling opportunity amid slowing world wheat/feedgrain trade. And China will push their demand to Brazil from February onwards. It will be hard to start a bull market from $14.50 March soybeans and $6.70 March corn.