- HEADLINES: Crude oil prices tank, ag futures follow lower; GFS weather forecast slightly drier in 1–10-day period, wetter in 11–15-day period; US soybean weekly export sales record large at 144 million bu.
- The sharp fall in US WTI crude oil futures produced selling across the ag sector including soybeans/soymeal where speculators had built up a sizeable, long position following the October Crop report. Soybeans/soymeal had fallen to sharp losses while corn, wheat and soyoil are trying to recover/bounce. Corn futures are back into the green at midday due to the strong potential of Brazilian farmers seeding less corn and the 33% rise in US corn sales to date.
- WTI crude oil is down $3/barrel to $73.50 December futures on the oil stock build in Cushing, Oklahoma and worry future energy demand from China. The US Biden/Xi summit was reported have gone well for Biden, with some saying that China’s negotiation softness was based on their weak economy. We have no way of knowing if China was trying to calm the political waters due to their weak economy or that they understand the intermingled economic and political ties between both countries heading into a new US presidential election. Yet, the summit is being called successful from the US’s perspective with talk that China has purchased additional US soybeans and is again asking for offers on US SRW wheat. The drop in US/French wheat prices has pulled prices back down to prior Chinese purchase levels back in October.
- Chicago brokers estimate that managed money has sold a net 3,200 contracts of Chicago wheat, 900 contracts of corn (sold 7,000 early and bought back 6,000 on the rally) and 8,800 contracts of soybeans. Funds have sold 6,600 contracts soymeal and 3,400 contracts of soyoil.
- USDA/FAS reported massive soybean sales which were largely expected due the daily reporting system announcements (buy the rumour sell the fact). The US sold 144.0 million bu of soybeans (US record sales for any week), 71.2 million bu of corn, and 6.5 million bu of wheat. For their respective crop years to date, the US has sold 1,035 million bu of soybeans (down 282 million or 21%), 831 million bu of corn (up 205 million or 33%), and 437 million bu of wheat (down 33 million or down 7%). WASDE is forecasting an 8% decline in US wheat exports, so the sales pace justifies their forecast. Corn and soybean sales are also on track to reach the USDA 2023/24 forecasts with the unknown being S American production.
- FAS/USDA reported that 220,000 mt of US soybeans were sold to an unknown destination in the 2023/24 crop year. The buyer is said to be China which is starting to add to their purchases for late January/February. Brazilian fob offers are hard to find in size until the last half of February.
- The Argentine presidential election is Sunday with Melei and Massa in a runoff. The polls have the candidates in a dead heat with 10% of the vote undecided. Argentine farmers favour Melei due to his campaign pledge to end taxation of ag exports and the eliminate the Argentine Central Bank. Whether such promises can be kept is unknown, but Melei would cause mass uncertainty in financial volatility should he be elected president this weekend.
- The midday GFS weather forecast is slightly drier than the overnight run in the 10-day forecast period, but wetter in the 11–15-day timeframe. Another round of heavy rain is forecast for S Brazil into the weekend with some areas enduring 250-300% of normal rain since Sept 1. The midday EU model will be delayed or non-available due to a power outage.
- The bulls are taking profits on long soybeans/soymeal to enjoy their Thanksgiving Day holiday with needed rain in next week’s N Brazilian forecast. Corn has again bounced off contract lows with wheat values trying to follow. EU wheat production will be down 15-20% next year on diminished seeding due to wet weather. Soyoil will gain on soymeal into yearend on rising domestic demand and falling supplies.