TFM Morning Update 10-19-2023

CORN

Corn is beginning the day slightly lower after yesterday’s gains. Outside influences such as the war in Israel and fears about the economy could be creating some risk off mentality.
Yesterday’s EIA report showed ethanol production increasing to 1.035 billion barrels per day, and stocks still managed to fall to the lowest levels since 2021 despite the higher production.
The trade range for today’s export sales report in corn is between 500 and 1,100k tons with an average guess of 835k tons. The majority of US corn exports have gone to Mexico.
China is moving closer to planting commercial GMO corn after having 37 GMO seed varieties approved in a further effort to be more self-sustainable.

Soybeans are mixed this morning with front months higher and back months slightly lower. Support is coming from an impressive move in soybean meal with big gains yesterday while soybean oil is slightly lower.
After Argentina’s drought last season and production of soybean meal cut so much, it seems like the US has picked up some of that business after all as shown by the tick up in futures prices.
With meal prices now up over $50/ton since October, crush margin has improved by over 60 cents per bushel in the past two weeks.
Brazilian grain exporters are being forced to re-route some cargoes of grain as the drought lowers water levels on Amazonian rivers causing barges to get stuck.

Wheat is trading slightly lower this morning along with corn as markets trade cautiously with an eye on the lower crude oil today.
Yesterday, wheat posted solid gains with world weather in wheat growing countries adding to the bullishness. Funds were likely covering a portion of their large short position yesterday.
The Australian wheat crop is expected to fall by 40 to 45% this year due to drought, and India’s production is expected to fall as well which may cause them to become a net importer.
Export sales of wheat in today’s report are expected to be between 350 and 800k tons with the average guess at 585k tons. Rumors have been circulating that China is looking for more US wheat.

Amanda Brill