Written Commentary
CORN
Prices were $.02-$.03 higher today with spreads also firming. The Dec-25/Mch-26 spread jumped out to a 6 month high at -$.12 1/2. Inside trade for Dec-25 futures having held support at yesterday’s low in overnight trade. US rains over the balance of the week will favor the S. plains and SW Midwest. Light totals around the Great Lakes region with the NW mostly dry until early next week. Ethanol production jumped to 1,112 tbd, or 327 mil. gallons in the week ended Fri. Oct. 17th, up from 316 mil. the previous week and up 3% from YA. Production was above expectations and a new MY high. There was 111 mil. bu. of corn used in the production process, or 15.8 mil. bu. per day, well above the 15.4 mbd needed to reach the USDA corn usage estimate of 5.60 bil. bu. In the MY to date there has been 710 mil. bu. used, or 15.1 mbd, an annualized pace of 5.511 bil. Despite the higher than expected production, ethanol stocks fell to 21.9 mil. barrels, below expectations and below YA at 22.2 mb. Implied gasoline usage was flat at 8.454 tbd however down 4.3% from YA.
SOYBEANS
Prices were mixed across the complex. Beans were $.04 higher in spot Nov-25 while deferred contracts were off $.01-$.02, meal was $1-$3 higher while oil slipped 50-60 points. Bean and meal spreads firmed while oil spreads weakened with several making new lows. Today’s high in Nov-25 beans has matched yesterday’s high at $10.38 with next resistance at the Sept. high at $10.53. Dec-25 meal surged thru its 100 day MA closing at a 2 month high. The next major resistance not until the Aug-25 high near $300 ton. Dec-25 oil briefly traded under $.50 lbs. before recovering to close just above it. Spot board crush margins slipped another $.03 ½ to $1.54 bu. with bean oil PV falling to its lowest level in nearly 5 months at 46.3%. Helping tilt prices higher were wire service reports that Japan’s new PM will offer to purchase US soybeans, natural gas and pickup trucks at next week’s meeting with Pres. Trump in exchange for lower US tariffs on Japanese vehicles. Yesterday the Trump Admin. announced they would reopen the FSA portion of the USDA while also distributing $3 bil. in aid to farmers hurt by China’s boycott of American soybeans. The Brazilian oilseed industry group ABIOVE is forecasting 2025/26 production at 178.5 mmt, above the USDA forecast of 175 mmt. ABIOVE projects Brazilian exports at 111 mmt, just below the USDA forecast of 112 mmt. Farmers continue to hold on to as much of this year’s harvest as they can, hoping for a favorable outcome in the upcoming US/China trade talks. As harvest advances however storage is becoming increasingly scarce. Markets remain hopeful that perhaps there is a scenario where the US captures a portion of the 300-350 mil. bu. of anticipated Chinese demand for the Dec/Jan timeframe.
WHEAT
Prices were $.02-$.04 higher across the 3 classes today. Strength was largely technical in nature with fresh new limited. Inside trade for the Dec-25 contract across all 3 classes. With prices hovering near 5-year lows. Early thoughts are 32.5 mil. acres, down 2% YOY and the lowest in 6 years. Yesterday Pres. Trump suggested a meeting with Russian Pres. Putin to discuss ending the war with Ukraine would be a “waste of time”. Trump went on to say that within a few days he’d reveal his updated thoughts on the war. Russia has stated that Ukraine must hand over the entire Donbas region as part of any peace settlement, a non-starter from Ukraine’s perspective. Algeria reportedly bought an undisclosed volume of wheat in their recent 50k mt tender. Sources suggest the price paid was just under $259/mt CF and likely sourced from the Black Sea region or Argentina.
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