TFM Morning Update 11-29-2023

CORN

Corn is trading mixed and near unchanged as the market continues to consolidate ahead of tomorrow’s first notice day, when long December position holders are notified of delivery.
Yesterday, the corn market experienced bear spreading and lower prices as traders liquidated or moved long positions out of the December to the deferred months due to lower export demand and to avoid taking delivery.
Hog prices in China have dropped to record lows as farmers liquidate their herds in accordance with the government’s mandate to lower the hog population. This could very well affect the import demand of corn and soybeans for feed in the coming months.
The threat of a carryout in excess of 2.1 bbu has moved fund managers to build a collective managed money short position of 185,502 contracts in the last Commitment of Traders report, the largest since July 2020. Managed funds are currently estimated to hold 171,000 short contracts.

The soybean complex is trading mixed this morning as the front months see some follow-through strength from yesterday’s solid close. While soybean meal higher with oil trading lower, as both products reverse some of yesterday’s moves.
With US prices currently the cheapest to China, there continues to be rumors of Chinese interest in US soybeans, and there is talk that they may have bought 6 – 8 cargoes for February delivery. Additionally, yesterday the USDA reported a private sale to unknown destinations totaling 123k mt.
As Argentina has struggled with low soybean supplies to crush, managed funds have grown their soybean meal long position to an estimated 138,000 contracts, the largest since last March, on increased US meal demand. While the fund’s position has supported prices recently, it may negatively affect them as once they begin to liquidate. Managed funds soybean position is currently estimated to be long 73,000 contracts.
On the weather front, the northern growing areas in Brazil are expected to see net drying through the end of this week with showers expected pick up next week and the following, bringing much needed moisture. While southern Brazil is expected to remain wetter than normal.

The wheat complex is mostly higher this morning with all classes showing gains with the exception of December Minneapolis, as markets follow through from yesterday’s strong price action.
Over the last few months, managed funds have grown their short positions in the wheat complex to just over 183,000 contracts across all three classes. This is just under the record short of just over 187,000 contracts. Currently, they are estimated to be short 102,000 Chicago wheat contracts.
Yesterday’s reversals higher combined with the managed funds large short positions and oversold conditions, is likely leading to some short covering.
Storms and heavy rain are sweeping through southeastern Australia, and according to some analysts, may have damaged the wheat crop possibly reducing it by 100,000 mt and turning upwards of 1 mmt of milling wheat into feed grade wheat.

Scott Masters