Written Commentary
SOYBEANS
Nov-23 closed below its 50 day MA at $13.59 for the first time in a month. Next support $13.32 ½. 100 day MA longer term support below the market at $13.01 ½. Oct-23 meal held support at its 100 day MA at $397. Oct-23 oil held support on a test of the $.60 level, however still closed at a 2 month low. Old crop stocks fell 10 mil. bu. to 250 mil. in line with expectations as exports rose by this amount. Soybean oil usage for biofuels rose 100 mil. lbs. to 11.8 bil. lbs. As we expected, soybean meal export rose another 200k tons to 14.2 mil. short tones. US production fell 59 mil. bu. to 4.146 bil. as the average yield fell to 50.1 bpa, down from 50.9. Notable acreage changes were ND +550k, IL + 350k, IA + 250K, KS + 200k, NE –250K, SD -200k, MN and OH both -150k. Demand was cut 45 mil. bu. enabling ending stocks to fall only 25 mil. to 220 mil., slightly above expectations. Exports were lowered 35 mil. bu. to 1.790 bil. while crush was lowered by 10 mil. bu. to 2.290 bil. If realized, this export figure would be the lowest since 2019/20. The average farm price for 23/24 rose $.20 to $12.90. Stocks/use at 5.2% are the lowest in 8 years. 2022/23 global stocks held steady at 103 mmt. Brazil’s exports rose 1 mmt to 95 mmt while China’s imports rose 2 mmt to a record 102 mmt. 2023/24 global stocks held steady at 119 mmt. China’s new crop imports rose 1 mmt to 100 mmt.
CORN
Today’s report was bearish corn as the higher acres more than offset the lower yield for the 2023 crop. Dec-23 corn held support at last month’s low of $4.73 ½. Corn needs to find a price level to better compete with Brazil in the global marketplace or likely find lower exports in subsequent reports. Old crop stocks fell 5 mil. bu. to 1.452 bil. near expectations. A 30 mil. bu. drop in corn used for ethanol production and 5 mil. bu. increase in imports was more than offset by a 40 mil. bu. increase in exports. US corn production rose 24 mil. bu. to 15.134 bil. 140 mil. above the average trade guess and just above the range of estimates. This year’s crop is the 2nd highest ever, just shy of the 2016 record at 15.148 bil. Driving the higher production was a 800k jump in harvested acres while the average yield slipped to 173.8 bpa from 175.1. Some of the large harvested acreage changes were NE +430k, KS +230k, MN + 200k, MO + 190k, ND + 140k, and OH +100k. Acres in IL an IA both dropped 300k. There were no changes in demand for the 2023/24 MY allowing ending stocks to increase 19 mil. bu. to 2.221 bil. Global 2022/23 stocks rose 1.5 mmt to 299.5 mmt, above expectations. Brazil’s 2022/23 production forecast rose 2 mmt to 137 mmt, while their export forecast rose 1 mmt to 57 mmt. China’s imports rose .5 mmt to 18.5 mmt. New crop 2023/24 global stocks jumped 3 mmt to 314 mmt, also slightly above expectations.
WHEAT
Today’s report was neutral to supportive on tightening global stocks. No story domestically as stocks were left unchanged at 615 mil. Bu. Final production for the winter wheat crop will be out on the last business day of the month, Fri. Sept 29th. US wheat ending stocks held steady at 615 mil. bu. There was a 10 mil. bu. shift in exports from HRW to spring forcing HRW stocks to rise to 256 mil. bu., while spring wheat stocks fell to 138 mil. Global stocks for 22/23 fell 1 mmt to 267 mmt. Global stocks for 23/24 plunged 7 mmt to 258.6 mmt, below the range of guesses. Here is a summary of some of the global production changes: Australian down 3 mmt to 26 mmt, Canada down 2 mmt to 31 mm, while Argentina and the EU both saw a 1 mmt production cut to 16.5 and 134 mmt respectively. Ukraine’s production rose 1.5 mmt to 22.5 mmt. If realized, global stocks would be the lowest in 8 years, while stocks/use ratio’s the lowest in 9 years.
See more market commentary here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
