TFM Morning Update 12-04-2023

CORN

Corn is trading lower this morning in sympathy with a lower soybean market as it runs into resistance at the 20-day moving average.
There continues to be talk of China’s trading house, Sino Grain, having approval to purchase more corn for reserves, with some estimating that China may now import between 30-40 mmt versus the USDA’s estimate of 23 mmt.
There is also talk that 2024 corn acres may drop due to an increase in soybean acres, which could reduce 2024 ending stocks estimates.
In Friday’s Commitment of Traders report the CFTC reported that managed funds added nearly 21k contracts to their short corn position in the week ending November 28. Bringing the net short position to a total of 206,478 contracts.

Soybeans and soybean meal are both trading lower this morning, while soybean oil is mixed, near unchanged.
Forecasts for better rain across the northern and central areas of Brazil are weighing on soybeans this morning, and the continuation of generally favorable weather in Argentina is adding pressure to soybean meal on the prospect of reduced US demand due to more normal Argentinian supplies.
There are some thoughts that increased US crush could reduce 23/24 soybean carryout to 225 mb versus the USDA’s current 246 mb estimate.
In Friday’s Commitment of Traders report the CFTC reported that managed funds reduced their net long soybean position in the week ending November 28 by just over 14k, bringing the net long position to a total of 67,562 contracts.

The wheat complex is mostly higher across the board as traders continue buy the market on follow-through strength from last week’s rally.
The forecast for the US southern Plains is warm and dry, and the market needs more normal weather in the northern hemisphere to offset reduced southern hemisphere crops, without which, prices could trend higher.
While uncertainty remains regarding available Black Sea supplies, Russia’s export prices continue to be cheaper than other exporting countries and adds resistance to prices.
In Friday’s Commitment of Traders report the CFTC reported that managed funds increased their net short Chicago wheat position in the week ending November 28 by just under 12k. Bringing the net short position to a total of 120,000 contracts.

Scott Masters