Written Commentary
SOYBEANS
Soybeans ended higher. Some feel market was adding risk if South America weather turn drier. The forecast suggest good condition in C/N Brazil and NE Argentina but dry conditions in S Brazil and SE Argentina. Argentina wheat crop could be half of last year. Some are asking what if the soybean crop is lower? Brazil new President may use CONAB to move markets. Argentina farmers are holding sales waiting for a good rain and new soya peso deal in December. Higher than expected US weekly soybean export sales and high crush margins offers support.
CORN
Corn futures ended unchanged. Headlines this week included better than expected corn sales and slow wheat sales. Ukraine export corridor was extended 120 days but vessel owners face challenges of increase freight cost, high wait times in Turkey and increase risk and increase cost of insurance. There is also concern about if Ukraine can move grain to export terminals as Russia bombs key infrastructure facilities. Low Brazil and Ukraine corn export prices could reduce US corn exports. There is some short covering in corn as S Brazil and SE Argentina turns drier. Some US Fed Governors feel US interest rates need to continue to increase to slow inflation. Data that US economy continues to grow could also trigger more interest rate hikes. Poland missile strike prompted a 6.53 to 6.77 daily range in CH. Fact that Russia did not shoot the missile sent CH to 6.57. Today CH is back near 6.74. US domestic corn basis remains historically high with farmer showing no signs of selling additional cash. Seasonals suggest higher corn futures into end of year. Volume tends to drop during Holidays.
WHEAT
Wheat is still wheat. Futures ended lower on what some feel is a search for new export demand. Ukraine export corridor was extended 120 days but vessel owners face challenges of increase freight cost, high wait times in Turkey and increase risk and increase cost of insurance. There is also concern about if Russia increasing exports and slowing already slow demand for US wheat exports. A rally is just a few headlines away given dry conditions in US south plains and fact Argentina wheat crop could be half of last years crop. Pending US RR strike could increase already challenging US domestic logistics. US consumer disposable income declining. Adds to uncertain to food demand. There remains rumors of cheaper EU wheat coming into US east coast. There is also talk that Mexico and Brazil are buying Russian wheat.
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