Ag Prices Consolidate Within Recent Ranges

MORNING AG OUTLOOK

Mixed, quiet trade across the Ag space this AM as prices consolidate within recent ranges.  Energy prices are lower despite Ukraine striking a Russian oil terminal in St. Petersburg this weekend, their largest attack on Russia’s energy infrastructure since the war began 4 ½ years ago.  Dec-26 WTI crude oil is down $.90 per barrel at $98.10, spot RBOB is down $.03 per gallon while HO is off $.02.  Dry conditions across the Midwest should have enabled US harvest to get back on track.  Dry conditions this week will enable US harvest to largely be completed by the end of the month.  Week 2 of the outlook shows above normal temperatures across the Midwest with above normal precipitation for the WCB and plain states, while below normal rainfall in the east.  Weekend rain in SA was restricted to EC Brazil and W. regions of Argentina.  Moderate to heavy showers this week for central and S. Brazil and much of Argentina where temperatures will be below normal.  Hot/dry for N. growing areas of Brazil.  The US $$ is little changed while US stock indices are higher.

Corn: 

Dec-26 is $.02 ¼ lower at $4.72 as prices hold above this month’s low at $4.70 1/4.  Secondary support is at $4.57 ¼.  I look for US harvest to have reached 50-52% still slightly below the historical average.  Friday’s CFTC data showed speculative traders unloaded another 86k contracts of corn, slashing their long position to 231k, likely down to 212k by Friday’s close, the smallest in 2 months.  China imported 430k mt of corn in Sept-26 bringing YTD imports to 2.11 mmt, up 126% from YA.  Ukraine is in talks with Turkey, India and Egypt on opening Black Sea navigation, which to me seems to be a moot point unless Russia agrees to join the discussion.  Until we see better demand for US corn, and/or a weather issue in SA, the path of least resistance remains lower as speculators shed length while US farmers harvest a better-than-expected crop, according to the USDA.

Soybeans: 

Nov-26 beans are steady at $12.61 in 2-sided trade while holding within Friday’s range.  Longer term support is at the 100-day MA, currently $12.26 ¼.  Dec-26 meal is up $.30 at $357.40 while Dec-26 oil is down 25 points at 66.88.  Crush margins are steady at $2.62 ½ bu.  MM’s were net sellers of 14k contracts of soybeans, 10k oil while just under 1k meal.  The combined MM long position remains historically large at 533k contracts, however likely down to around 505k by Friday’s close.  I look for US harvest to have reached 66%.  Soybean sales to China have likely reached 16-16.5 mmt.  If China’s 25 mmt of soybean purchases is already reflected in the USDA export forecast of 1.695 bil. bu.(46.1 mmt) then sales to non-Chinese buyers must slip to 21 mmt, down 27% YOY.  Current commitments to non-Chinese buyers at 430 mil. bu. are down only 13%.  I’m leaning toward the current export forecast still too low.

Wheat: 

Prices range from $.02 lower to $.01 higher.  CGO Dec-26 is off $.01 ½ at $6.59, Dec-26 KC is unchanged at $7.04, while Dec-26 MIAX is up $.00 ½ at $6.77, all holding within Friday’s range.  APK Inform reports Ukraine’s grain shipments in the week ended Oct. 14^th at 373k mt were up 29% from the previous week.  Wheat shipments at 295.5k mt were up 24%.  On Friday the Rosario Grain Exchange reported Argentina’s grain exports for the 25/26 MY had reached 105 mmt, a record high while up 25% from its 5-year Ave.  MM’s were net sellers of 12k contracts combined across the 3 classes of wheat, reversing their position to net short 6k contracts.  They have been net sellers in wheat for 6 consecutive weeks while net short for the first time in 3 months.

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