TFM Midday Update 10-23-2023

CORN

Crude oil slipped lower this morning, which may be putting some pressure on grains. This may be tied to the fact that Israeli forces did not launch a ground invasion into Gaza over the weekend because they are trying to get hostages out first. The high tensions are likely to keep the crude market volatile.
Harvest progress will be slowed this week as a large system moves across the Corn Belt, bringing heavy rain over the next several days.
After testing the 100 day moving average last week (around 5.09), December corn has since backed off and is trading below 5.00 again.
On this afternoon’s Crop Progress report, US corn harvest is expected to be past the halfway point, and perhaps as much as 60% complete.

Both soybean meal and oil were under pressure this morning, weighing on soybeans. Meal has since rallied, making a new daily high for the move, lending support to soybeans, but not enough to rally them above unchanged. Good rains in some of the dry areas of South America may be the culprit. Amazon River water levels remain historically low, however, so more rain will be needed to reverse the dry trend.
Feed demand from China should remain strong, with reports that there are 6.3% more hogs on large Chinese farms vs last year.
Friday’s Cattle on Feed report showed placements at 106% vs the trade expectation of 98%, which could ultimately affect feed demand.
This afternoon’s Crop Progress report is expected to show US soybean harvest about 75% complete.

Both Argentina and Australia are said to have received beneficial rains in their wheat growing regions. Each of these nations has been struggling with drought, and while the moisture is welcomed, more will be needed.
There is some concern, globally, about lower protein wheat. This may explain why Minneapolis wheat futures are rallying and gaining versus both Chicago and Kansas City contracts.
There has been little fresh news out of the Black Sea area, but there are reports that as many as 20 vessels have traveled through Ukraine’s humanitarian corridor so far.
Some private analysts now see Australia’s total wheat crop between 26 and 28 mmt – for reference the USDA is estimating 24.5 mmt of production.

Brandon Doherty