CORN HIGHLIGHTS:

• Corn futures fought off session lows triggered by unexpected Brazil election results but still finished slightly lower on the session. December corn lost 1 cent to 455, while March was down 1 ½ cents to 468 ¾. December corn tested the psychological 450 levels on the session lows.
• A surprise result in the Brazil election on Sunday pressured grain markets. Current Brazil President Lula was the surprise winner in a general runoff election. His victory strongly pressured the Brazilian real currency, triggering selling in the grain markets, especially soybean futures.
• USDA made an adjustment to the September corn yield after making adjustments in the Kansas and Nebraska yield from the September report. A “processing error” affected both yield and production forecast for the month of September. The final result did not impact the current yield estimate for corn from the October WASDE report.
• USDA released a weekly Export Inspections report on Monday. For the week ending October 15, USDA corn export inspections totaled 24.6 mb. This was down from 2.7 mb from last week’s 27.3 mb total. The current inspections pace is now 8% lower than last year, while the USDA is forecasting a 4% drop in corn exports.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day sharply lower as a result of the surprising Brazilian Presidential win of Luiz Lula da Silva against Bolsonaro, who was heavily favored to win. The results caused the Brazilian real to fall making their soybeans and other export products cheaper to China. This bled into U.S. soybean prices due to fears that China would begin buying fewer U.S. soybeans if they are comparatively more expensive.
• November soybeans lost 15-1/4 cents to $12.41-1/4 but bounced off their lows at the 100-day moving average at $12.29, which was encouraging and may indicate strong technical support. March soybeans lost 15 cents to $12.61, while December soybean meal lost $5.90 to $340.20 and December soybean oil gained 0.18 cents to 67.01 cents despite a drop in crude oil. December crude oil is down $1.32 a barrel to $101.93 despite Iran escalating threats on the U.S.
• Today’s Export Inspections report was strong for soybeans following a two-week stretch where China made a purchase of U.S. soybeans nearly every day. 91 million bushels of soybeans were reported for export for the week ending October 22, with China the top destination followed by Mexico.
• Friday’s CFTC report saw funds as sellers of 30,555 contracts of soybeans as of October 20, reducing their net long position to 206,936 contracts. They sold 19,470 contracts of soybean oil, leaving them long 69,858 contracts, and sold 1,438 contracts of meal, leaving them long 204,693 contracts. Despite the sell-off, funds are still near record long.

WHEAT HIGHLIGHTS:

• Wheat closed lower, largely pressured by the sharp drop in soybeans. This itself was caused by the unexpected Brazilian re-election of President Lula da Silva, and the subsequent plunge in the real versus the dollar. In the December contract, Chicago fell 9 cents to 616, Kansas City dropped 5-1/2 cents to 659, and MIAX lost 7-1/2 cents to 634.
• Weekly wheat inspections came in at 6.8 mb. This brings total 26/27 inspections to 273 mb, down 35% from last year. Inspections are currently running well below the USDA’s estimated pace; exports in 26/27 are forecasted at 750 mb, down 17% from the year prior.
• Paris milling wheat futures saw significant losses today, which also pressured the U.S. wheat complex. The December contract broke to the downside, losing 7.25 euros on the day – this is the lowest that contract has traded since mid-August. This decline may have been caused by hopes for peace in the Black Sea, with talks between the U.S., Russia, and Ukraine scheduled for November 10.
• According to the Egyptian prime minister, his nation’s wheat self-sufficiency has reached 52%. Additionally, he stated that the government will increase the purchase price of domestic wheat in the 26/27 season. Furthermore, grain storage capacity and increases to cultivated land area are expected over the next two years.
• Reports from Interfax suggest that the Russian government will begin purchases of domestic wheat on October 29. This is said to be in an effort to support the domestic market. Their wheat prices have recently been pressured due to shipping issues in the Black Sea.

DAIRY HIGHLIGHTS:

• Spot powder fell 3.50c lower on Monday while the butter market lost 4c to $1.30/lb.
• Powder now sits 20.75c off of this month’s highs as sellers have gotten a bit more active near all-time highs.
• A bearish cold storage and milk production report last week set the tone for the market as overproduction continues to weigh on prices.
• Class III drifted lower in each contract except for November. November holds $1.33 premium to December as the market prices in the Holiday demand.
• This should be a quiet week ahead for the dairy markets. No major reports are set to be released.

 Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

Brandon Doherty