TFM Midday Update 10-27-2023

CORN

Rains moving across the central US are helping the Mississippi River levels and barge traffic is reportedly increasing. The rains may slow harvest, but the moisture should be beneficial for the soil and next year’s crops.
Corn, while back in the recent trading range, may be finding support at these lower levels. Since the near term downtrend began a week ago, Dec futures have not traded below 4.75. Also, as harvest nears completion over the next few weeks, pressure may begin to ease.
The US reportedly attacked some Syrian targets as retaliation for drone strikes against US positions. This is further escalating tensions and is keeping the crude oil market volatile, which may in turn affect the grain markets.
The US corn export commitment is up 24% from last year, however, that is slightly below the USDA’s forecast of a 27% increase.

Scattered showers in Argentina should help with planting and germination. Some rain is also in the forecast for dry central Brazil, but the southern area continues to get too much – this is causing flooding and crop damage. As much as 3-10 inches of rain are in the forecast for both Brazil and Paraguay.
The US soybean export commitment is still down 29% compared to last year. With the USDA forecasting a 12% decline, a lot of ground will need to be made up.
There continues to be uncertainty in regard to China’s demand for US soybeans. However, the recent signing of the framework deal (though mostly ceremonial) is a step in the right direction for more exports. There are also rumors circulating that China may have cancelled purchases of South American soybeans in favor of US beans out of the PNW.
December soybean meal made a new contract high today, offering support for soybean futures.

Yesterday’s reports that Ukraine closed the humanitarian corridor through the Black Sea were later denied, and the route is still open. This may be what is weighing on wheat this morning.
India has plans to sell more wheat in the open market in order to help tame rising prices. Their government is set to sell 300,000 mt out of the reserves, which is up from 200,000 mt previously.
The first US winter wheat crop ratings will be released on Monday, and the trade is expecting conditions around 50% good to excellent. If true, that would be the highest rating for this timeframe since 2019.
The US wheat export commitment is down 6% from last year. For reference, the USDA is estimating a 4% decline.

Brandon Doherty