TFM Midday Update 11-22-2023

CORN

Today the USDA reported 128,000 mt of corn sold to unknown destinations for the 23/24 marketing year.
Corn remains in a relatively sideways pattern as traders remain uncertain about South American weather, Ukraine exports, and the psychological resistance at the five-dollar level.
Crude oil is sharply lower this morning after OPEC’s weekend meetings could be delayed. However, there is talk that they may issue further production cuts at these lower prices. Reportedly, Israel and Hamas have agreed to a temporary ceasefire which may also be pressuring crude oil.
Taiwan purchased 65,000 mt of feed corn, which is likely to be fulfilled by the US Gulf. Additionally, South Korea bought 65,000 mt which may be sourced from the US or South America.
As a reminder, markets are closed tomorrow for the Thanksgiving holiday, and the December grain option expiration is on Friday.

There is talk that China may have some interest in US soybeans from the PNW for the January / February time frame. Unconfirmed rumors indicate they may have purchased 5-8 cargoes.
Lower crude oil futures are also weighing on soybean oil, and therefore soybean futures this morning.
Southern Brazil continues to see too much rain, with flooding as a result. Nationally, CONAB said that 65% of Brazil’s soybean crop is planted as of Monday, 10% behind last year and 17% behind the average. However, their production estimate is unchanged at 162.5 mmt.
Despite no official adjustments, some private estimates of the Brazilian soybean crop are as low as 156 mmt due to the drought and heat that have so far affected the central and northern areas.
Argentina’s soybean meal exports are said to be down 6.6 mmt, 36% below a year ago levels – this should continue to support US meal demand.

Wheat is trading higher today after reports came in regarding a new attack on Ukraine’s port city of Odesa by Russia, and also supportive was a flash sale of wheat reported this morning.
This morning, the USDA said that 110,000 tons of SRW wheat were sold to China for the 23/24 marketing year. Chinese purchases of wheat are always surprising and encouraging with the world mostly shunning US wheat in favor of Russia.
Ukrainian exports of grain are down 28% so far in 23/24 at just 12 mmt, and the UN is expressing concerns about whether Ukraine will have enough supplies to cover domestic and export demand. Since July, 28 attacks have been reported on Ukrainian port infrastructure.
Non-commercials currently hold a large net short position in wheat and part of the rally between yesterday and today has been due to short covering. If more friendly news comes out for wheat, funds could be forced to cover this short position in a bigger way.

Brandon Doherty