Written Commentary
MORNING OUTLOOK
Grains are lower. SF is down 4 cents and near 14.58. SMF is near 412.2. BOF is near 74.95. CH is down 2 cents and near 6.84. WH is down 6 cents and near 8.60. KWZ is down 4 cents and near 9.46. MWZ is down 5 cents and near 9.49.
On Friday, China announced that the zero tolerance policy on Covid cases will continue. China October trade unexpectedly contracted. Jan-Oct soybean imports were down 7 pct from last year at 73.2 mmt. There is also talk that Russia requested that a large Russia Bank be exempted from sanctions. This will allow for Russia to export grain and fertilizer and open the door to have the Ukraine corridor export deal extended to 2023.
Soybean futures are down marginally. Soybeans futures rallied 64 cents last week. Combination of strong domestic US soybean crush margins and sharply higher soyoil prices helped rally. Increase capacity for soyoil based renewable fuels is helping soyoil. B100 can be used as diesel fuel alternative. Diesel fuel stocks are low and prices near 5.40/gal. Brazil and Argentina are cool and dry. Forecast calls for warmer temps and normal rains.
Corn futures remain near the midpoint of the 6.50-7.00 futures range. Open Ukraine corridor and lower Brazil corn prices could drop US corn exports. Ukraine corn export prices are 2.60 below US. Better SA weather could push corn futures lower. Nat Gas is higher on colder US Midwest and NE forecast.
Wheat is wheat. Argentina wheat crop was lowered due to dryness. Australia wheat quality is in question due to too much rain. US south plains HRW crop rating were lowest on record. Wheat futures could remain in the wide 9.00-10.00 range until more is known about World wheat import demand and north hemisphere 2023 wheat crop.
US Dollar is lower. US stocks are higher.
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