TFM Midday Update 9-22-2023

CORN

Corn began the day higher but has slipped and is now trading relatively unchanged. Grains are having trouble moving higher as harvest begins.
This week’s Federal Reserve announcement that rates would remain high has caused the dollar to rally which makes US exports less competitive with the rest of the world.
Last week’s ethanol production fell by a much-larger-than-expected 6% to 980,000 barrels per day, and ethanol stocks also had a gain of 2.4%.
CONAB estimated Brazilian corn production lower after reducing acres and it is now seen at 119.8 mmt which is down from the USDA’s estimate of 129.0 mmt.

Soybeans are trading higher but have slipped a bit from the earlier morning highs. The November contract is attempting to break back above the 100-day moving average. Soybean meal is lower while soybean oil is higher.
In Brazil, weather in central and northern Brazil are too hot and dry, but next week rains are expected to materialize which would help the recently planted soy crop. Estimates for next year’s production are at 163 mmt.
Argentina’s soybean planting is set to cover 39.54 million acres, the same as last year, but another severe drought is not expected, so a much larger crop than last year is expected.
Basis is expected to erode further into harvest as low water levels on the Mississippi River once again affect barge traffic. Heavy rains are expected from the northwestern Plains through Texas and Arkansas over the week which could help improve water levels.

Wheat is trading higher today but is still near contract lows as pressure comes from a new high in the US dollar index which makes wheat exports less competitive.
Russia has decided to stick to the $270/mt price floor proposed by the government which has given Romania, Bulgaria, and France to begin selling wheat below Russian offers.
A second grain ship carrying 18,000 tons of wheat has left the Ukrainian Black Sea port for Egypt, and three more cargo ships are heading to the port to pick up grain bound for China.
In Australia, the drought caused by El Nino conditions is expanding, and the wheat crop is set to fall significantly by 36% from a year ago.

Amanda Brill