This Week in Commodities 11-04-2022

Corn Quiet Again this Week

  • December CBOT corn futures added a 1/4 cent this week to close at 681
  • July of 2023 CBOT corn futures added 1-1/2 cents this week to close at 682
  • The United Nations is attempting to extend the Russia/Ukraine grain deal ahead of the November 19 deadline; Russia wants to see concessions in their favor before signing an extension.
  • Chinese customs updated its list of approved Brazilian corn exporters this week, likely meaning Brazil can start exporting corn to China; This is not good news for US corn exports which are running behind the five-year average pace
  • A push above $7 in the near term may be difficult with export sales slow to start, US harvest starting to wrap up and a US dollar pushing back to recent highs


Soybeans Rally this Week

  • January CBOT soybean futures added 62 cents this week to close at 1462-1/4
  • July of 2023 CBOT soybean futures added 58-3/4 cents this week to close at 1478-1/4
  • Front-month soybean futures rallied above the 200-day moving average this week to their highest levels in six weeks as world vegetable oil prices surged; Crush margins remain strong as well
  • US soybean exports have been good to start and may continue strong as China is ready to relax its zero-Covid policy which has smothered their economy in the last two-plus years
  • Traders expect the USDA to leave US soybean yield unchanged at 49.8 bushels per acre in next week’s report; This compares with StoneX estimate of 50.9 bushels per acre this week

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Wheat Prices Higher for the Week

  • December CBOT wheat futures added 18-1/2 cents this week to close at 847-3/4
  • December KCBOT wheat futures added 28-1/4 cents this week to close at 953-1/4
  • December MGEX spring wheat futures added 9-1/2 cents this week to close at 954-1/2
  • US winter wheat was rated just 28% good to excellent in the first ratings for the year, this is the poorest rating to start ever and compares to 2012 at 33% good to excellent
  • 74% of the 2023 US winter wheat area remains in some sort of drought as of October 25
  • Although expensive, US wheat exports had their best September in nine years; The good monthly total, however, is overshadowed by the worst January to July of wheat exports in 51 years; Total sales for the 2022/23 marketing year are at 20+ year lows


Continued Strength in Dairy Markets

Class III milk futures were the big winners of the week with December contracts gaining $1.51 per CWT to settle after Friday’s trade at $20.35. December Class IV contracts were both volatile and higher on the week, gaining 13 cents to settle at $21.47, but also managed a low of $20 during Wednesday’s trade. Spot butter took a massive hit this week, falling 53 cents from Monday to Wednesday, recovering during Thursday and Friday to shed just over 36 cents per pound on the week. This massive selloff has the spot butter price under $3 per pound for the first time since late August. Other major spot markets were mixed this week with whey gaining nearly 4 cents per pound, powder down 3 cents, and cheese up a nickel. The dead cat bounce may still be true here but follow-through buying on yesterday’s gains may indicate further gains next week.


Keegan Madigan

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