TFM Midday Update 9-27-2023

CORN

Energy prices are rallying this morning, providing a boost to corn and soybeans too. As of this writing, November crude oil is up over two dollars per barrel.
The fact that both South America and Ukraine are shipping out corn may create some overhead resistance in the market, despite the fact that US prices are competitive.
The western Corn Belt should see harvest advance over the next week with little to no rain. In the Great Lakes area, it is a different story, with rains slowing progress over the next couple of days.
The significant net short position held by funds may be reduced before Friday’s quarterly Stocks report. This will be the next big day for numbers until the October WASDE report.

November soybeans broke through and are holding above resistance at the 100-day moving average (about 13.07). A close above this level would look positive technically, but the head and shoulders chart pattern is still ominous and potentially points to more downside.
Brazil plantings are a bit slower than normal due to dry conditions, and this may be offering some support to soybeans. However, the second week of the forecast shows some shower activity for central Brazil.
Chinese Dalian soybeans, soybean oil, soybean meal, and veg oils all traded higher, giving a boost to US futures.
Aside from the upcoming reports on Friday, it is also month and quarter end. This may be putting some volatility back into the market, as traders and funds square up positions.

The US Dollar Index continues higher for the fifth day in a row, reaching levels not seen since late November of 2022.
Tunisia purchases wheat for around $234 per ton, well below Russia’s floor of $270. Additionally, Egypt is talking with Russia regarding the purchase of 1 mmt of wheat on a private tender.
There is talk that France sold between two and four cargoes of wheat to China.
Argentina’s drought conditions are expected to get worse over the next several weeks, which offers a bullish backdrop for the wheat market. US futures continue to struggle, however, with exports still not doing well.

Brandon Doherty