Written Commentary
MORNING AG OUTLOOK
Mixed trade across the Ag space this AM as early strength across the soybean market couldn’t hold. Trade awaits USDA production and WASDE updates tomorrow while tri-lateral peace between US, Russia and Ukraine are scheduled for Tuesday and Wednesday in the UAE. US Treasury Sec. Bessent and USTR Greer held a conference call with their Chinese counterparts on Friday where they emphasized China fulfill their US Ag. purchase agreement. Pres. Trump is expected to meet with Chinese leader Xi while at the APEC Summit in China in less than 2 weeks. Energy prices are lower with spot WTI crude oil down $3.60 per barrel at $87.25 while spot RBOB is down $.09 per gallon with HO off $.08. Dry across the US Midwest this weekend should have enabled corn and soybean harvest to advance closer to the finish line. Widespread rains across Brazil this weekend with heaviest totals in the interior South. Moderate rain across the WC region of Mato Grosso helps restore soil moisture. Moderate to heavy precipitation across the Central and Northern growing areas over the next 2 weeks will be beneficial for yield prospects. Moderate rains this weekend in Central and S. Argentina. Above normal temperatures this week with widespread rain in the Western and Northern growing areas. The US $$ is moderately lower while holding within Friday’s range. US equity markets are higher.
Corn:
Dec-26 is up $.01 ½ at $4.43 in 2-sided trade overnight. Money managers sold nearly 79k contracts of corn, flipping their position around to net short in corn for the 1st time in 4 months. By Friday’s close we had the speculative short position at 22k contracts. The Ave. production est. in the Reuters poll at 15.962 bil. bu. is down 72 mil. bu. from the USDA’s October est. Ending stocks are expected to fall only 9 mil. bu. to 1.840 bil. I’ve got production at 16.055 bil., with ending stocks growing to 1.870 bil. AgRural reports Brazil’s 1st crop plantings have reached 71%. As of Nov. 1st, EU corn imports at 7.4 mmt are up 34.5% YOY. APK Inform lowered their Ukrainian production forecast 2.7 mmt to 29.1 mmt, while also slashing their export forecast 10% to 18 mmt. This compares to the USDA forecast of 31.8 mmt on production with exports at 22 mmt.
Soybeans:
Jan-27 beans are steady at $11.94, Dec-26 meal is down $1.50 at $317.70 while Dec-26 oil is up 10 points at 62.35. On Friday Jan-27 soybeans ending a streak of 9 consecutive lower closes. CFTC data on Friday showed money managers were net sellers of 127k contracts across the soybean complex, reducing their combined long position to 285k contracts, the smallest in 2 months and well below the recent record of 558k. Crush margins (Jan/Jan) are steady at $1.95 bu. with bean oil PV inching up to 49.6%. The Ave. production est. in the Reuters poll at 4.597 bil. bu. is up 35 mil. bu. from the USDA forecast in Oct-26. Ending stocks are expected to rise 16 mil. bu. to 331 mil. I’ve got production at 4.592 bil., with stocks at 335 mil. I’d estimate Chinese purchases at 19-19.5 mmt. I look for the USDA to raise exports another 10 mil. bu. AgRural reports Brazil’s plantings have reached 64% as of last Thursday. EU soybean imports as of Nov. 1st at 4.06 mmt are down 3.6% YOY. Meal imports at 6.14 mmt are down 15%.
Wheat:
Prices are steady to $.03 lower in quiet 2-sided trade. CGO Dec-26 is steady at $5.91, Dec-26 KC is $.03 lower at $6.29 ½, while Dec-26 MIAX is off $.01 ½ at $6.14 ½. All 3 classes are holding within Friday’s range. MM’s sold another 25k contracts combined across the 3 classes, extending their short position to 105k contracts, the largest in 9 months. At Friday’s close we have the MM short position in CGO up to 93k contracts, the largest in 10 months. I see US wheat ending stocks hold steady at 740 mil. bu. while the Reuters poll shows stocks rising 6 mil. to 746 mil. After cutting their export forecast 25 mil. bu. last month, I see the USDA holding steady this month at 750 mil. The recent price plunge has left US wheat much more competitive in the global marketplace. APK Inform raised their Ukrainian production forecast 1 mmt to 26.5 mmt, while also raising their export forecast 1 mmt. EU soft wheat exports thru Nov. 1st at 9.7 mmt are up 2.6% YOY.
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