TFM Midday Update 11-27-2023

CORN

Corn is under pressure this morning and has made a new contract low at 475 in the March contract as traders come to terms with the large US supplies coming to the market soon.
Although large supplies are pressuring prices, demand has been strong with export sales and shipments up 27% from last year and ethanol demand positive.
In South America, weather has been a concern, but some showers have fallen over central and northern Brazil this weekend which may have added some selling pressure. Total rainfall is still below normal.
Brazil’s exporter group ANEC is expecting Brazil’s November exports at 7.9 mmt which would compare to 5.5 mmt at this time a year ago. This is despite the fact that U.S. corn is the cheapest feed grain available right now.

Soybeans are trading slightly lower today but are faring better than corn and wheat today as trade tries to get a grasp on South America’s crop conditions and upcoming forecast.
In Soybean meal, the two nearby months are trading higher while deferred contracts are lower, and soybean oil is higher. Based off of January futures, crush margins have been improving lately.
While central and northern Brazil are too dry, behind on planting, and may have to replant, southern Brazil is far too wet and is only 25% planted which is down from 55% last year.
Argentina’s crush is said to be down to about 25% of capacity because of a lack of soybeans. Additionally, farmers are said to not be selling. This is in part due to a possible devaluation of their currency, and the possibility that their new president may reduce export taxes.

Wheat is trading lower today with Chicago leading the way down and near its contract lows. Both KC and Minneapolis wheat have made new contract lows today.
Russia continues to offer wheat for much cheaper than US and other country’s offers which has severely depressed prices. Paris milling wheat futures in the March contract made a new low and were down in eight of the past ten trading sessions.
Russia has reportedly set a 24 mmt grain export quota for wheat, barley, corn, and rye, February 15 through the end of June. Additionally, they have issued a ban on Durum wheat exports from December 1 to May 31.
After more Russian attacks over the weekend, Ukraine is now planning to place convoy vessels in the Black Sea to protect their export corridor.

Amanda Brill