Written Commentary
CORN
Prices were $.06-$.08 higher with not a whole lot of fundamental news to support today’s price surge. After early weakness spreads firmed with FND on Friday for Dec-25 futures. As of yesterday there were 80 contracts registered with the CME for delivery. Mch-26 corn surged thru its 50 day MA resistance at $4.44. Yesterday’s CFTC data showed that as of Oct. 14th MM’s were holding a net short position of 191k contracts corn, much bigger than expected. Russian attacks on Ukraine’s rail system has limited their ability to export agricultural commodities. As of Nov. 25th their corn exports for the 25/26 MY at 3.12 mmt are less than half of the 7 mmt sold YA. Ethanol production increased to 1,113 tbd, or 327 mil. gallons in the week ended Fri. Nov. 21st up from 321 mil. the previous week, however down .5% from YA. Production was above expectations and well above the pace needed to reach the USDA usage forecast of 5.60 bil. bu. Ethanol stocks slipped to 22.0 mil. barrels, below expectations and below YA at 22.9 mb. Perhaps the corn market is building in expectations for lower production in Jan-26. The historical lean for corn production in January is lower as the USDA has lowered the crop size from the November report 65% of the time over the past 35 years.
SOYBEANS
Prices finished mostly higher across the complex with beans up $.03-$.07, meal was steady to $1 lower while oil jumped 45 points. Bean spreads firmed while product spreads were steady to weaker. Jan-26 beans traded to new highs for the week with resistance at $11.36 ½, the midpoint of this month’s range. Inside trade for Jan-26 meal. Jan-26 oil traded to a new high for the week while rejecting trade below $.50 lbs from earlier this week. Spot board crush margins backed up $.03 to $1.34 ½ bu. with bean oil PV improving to 44.3%. Overnight wire services reported China purchased between 10-15 cargoes of US beans for January shipment, a day after Pres. Trump and Xi spoke on the phone. These beans will be shipped from both the US gulf and PNW. China reportedly paid $2.20 over Jan-26 futures for PNW beans and $2.30 over Jan futures for US gulf beans, both well above the $1.80 over spot futures for Brazilian soybeans. Best guess with this latest purchase China has secured roughly 3.5 mmt of US beans since late Oct. or nearly 30% of the 12 mmt the Trump Admin. indicates China has agreed to purchase for the 25/26 MY. CFTC data as of Oct. 14th showed MM’s held a net short position of 122k contracts of meal, pretty much flat in soybeans while long just over 4k contracts of oil. Currently thinking speculative traders still a healthy short in meal at nearly 80k contracts, while long 15k oil and 96k soybeans.
WHEAT
Prices ranged from $.06 lower in spot MIAX to $.05 higher in spot KC futures. Early strength saw new weekly highs for all 3 Mch-26 contracts. Mch-26 CGO has 50 and 100 day MA resistance at $5.47. The higher trade in Mch-26 KC was capped at its 50 day MA. A South Korean feed group bought just over 91k mt of US milling wheat split up between white, HRW and durum. Another S. Korean feed group bought 40k mt of Canadian spring wheat at $260/mt FOB for Mch/April shipment. As of Oct. 14th MM’s were net short nearly 112k contracts of CGO wheat, 68k KC and 29k MIAX. The net short of 208k contracts across the 3 classes was the largest since May-25. Still unclear on where Russia sits with the US supported peace deal.
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