TFM Midday Update 10-09-2023

CORN

The big news from this weekend was the Hamas missile attacks on Israel. This news has crude oil up over three dollars per barrel this morning. If energy prices continue to rise, it could provide support for ethanol and the corn market.
December corn closed on Friday with the highest weekly close in over one month. While it remains rangebound for now, this is somewhat unexpected given the fact that the U.S. Midwest is in the thick of harvest.
The U.S. attaché in Beijing increased their estimate of Chinese corn production to 280 mmt (from 277 mmt). In addition, China’s corn import estimate was reduced from 23 mmt to 20 mmt.
Northern and central Brazil are too dry, but southern regions are too wet. According to AgRural, Brazil’s first corn crop is now 28% planted. In Argentina, the Buenos Aires Grain Exchange has said that their corn crop is 14% planted.

After showing some strength overnight, soybean futures have since faded into negative territory as of mid-morning. The market may be wary of war in the Middle East with uncertainty as to what that might to do the grain trade.
According to CFTC data, as of October 3rd, funds reduced their net long position in soybeans to only 5,000 contracts.
Due to the Columbus Day holiday today, Export Inspections and Crop Progress reports are delayed until tomorrow. However, soybean harvest is anticipated to be about 50% complete as of Sunday.
This Thursday traders will receive the October Supply and Demand report. Expectations at this time are for a slight decrease to soybean yield and production.
China’s soybean futures price reportedly dropped 4% as they return from their Golden Week holiday. This may weigh on the U.S. market, but now that they are back it could also mean new purchases of U.S. soybeans.

New Russian attacks on the Odesa port in Ukraine, along with uncertainty in the Middle East, are keeping wheat afloat at midday despite lower corn and soybean futures.
Despite the danger they face, there are said to be another 12 vessels waiting to enter Ukraine’s humanitarian corridor.
According to IKAR’s estimate, Russian grain production is increased 1.2 mmt to 141.2 mmt. Exports are estimated at 64.5 mmt vs 64 mmt in the previous projection.
The USDA is estimating Argentina’s wheat crop at 16.5 mmt, however, some analysts have the crop at 15 mmt or lower due to the dryness they are experiencing.

Brandon Doherty