TFM Midday Update 9-25-2023

CORN

Harvest continues to keep pressure on the grain markets. Rains over the weekend that ran across the western Midwest caused some delays, but the East was mostly dry allowing harvest to advance.
Globally, central and northern Brazil remain dry, along with western Argentina. In addition, Australia, southern Russia, and Ukraine are also dry.
On Friday, the USDA will release the quarterly Grain Stocks and small grain summary reports. With corn having been in a sideways trading range, this could be the next big “data” day with the potential to move the market.
According to the CFTC, Friday’s Commitments of Traders report showed that funds added to short positions in corn and wheat. They are now net short about 145,000 corn contracts.

Last week, November soybeans broke support and are still trading below the 100-day moving average. However, they are very oversold by some technical metrics, including stochastics. This could indicate a bottom is near, however, a commodity can become and remain oversold for a long time in a strong downtrend.
China last week purchased some soybeans from Brazil, Argentina, in addition to 1-2 cargos from the US PNW for October.
Chinese Dalian soybean futures were lower, but soybean meal, palm oil, and soybean oil were higher on hopes of increased Asian demand.
According to the CFTC, managed funds reduced their long position in soybeans to 46,000 contracts (a 28,000-contract reduction).

Despite new rumblings in the Black Sea, wheat traders are not enthused enough to stimulate much buying interest. On Friday Ukraine attacked Sevastopol, a port in Crimea, and Russia again attacked Odessa overnight.
According to the CFTC, managed funds are now net short about 125,000 contracts of wheat (all three classes), with about 97,000 of that being Chicago wheat.
Australia’s drought is expected to worsen, and their wheat exports could drop to 17 mmt. For reference, last year’s exports were a record 32.5 mmt.
December KC wheat is testing the 7.00 support area today. Despite some global weather concerns, Russia continues to pressure the wheat market, with some analysts predicting their September exports will be record large.

Brandon Doherty