Written Commentary
CORN
Prices were mixed with nearby futures $.01 – $.04 lower, while deferred contracts are steady to $.02 higher. Speculative selling along with liquidation of the Dec-23 open interest ahead of Thursday’s FND seems to providing reason for the lower trade. Spreads continue to drop to historically wide levels. Dec-23 traded below its 100 month MA at $4.55, however held support above $4.50. A South Korean feed group bought 68k mt of corn at $254.60/mt CF from with US, South American or South African origin. The Korea Feed Association passed on their recent tender citing the lower offer at $260/mt CF was too high. Another Korean Feed group bought 132k mt of feed corn likely from a combination of SA and US origin. Money managers were net sellers of just over 22k contracts last week extending their short position to 185,502 contracts, their largest short position since July-2020. The short position has likely swelled to over 190k contracts since. EU corn imports as of Nov. 26th have reached 7.1 mmt, down 42% from YA.
WHEAT
Prices were higher across all 3 classes today with Chicago and MGEX up $.10 – $.13, while KC was $.20 – $.23 higher. KC Dec-23 featured a key reversal day with a new contract low in the overnight session followed by a surge to close above the previous session high. It was an inside trading session for both Dec-23 CGO and MGEX. A South Korean flour mill purchased 95k mt of milling wheat with 50k from the US and 45K from Canada. No price details yet. Taiwan is tendering for 109k mt of US origin wheat for Jan/Feb shipment. Jordan passed on their recent tender to purchase 120k mt of milling wheat. As of Nov. 26th EU soft wheat exports have reached 12 mmt, down 18% from YA. Russian Ag. Ministry notes their countries grain harvest is 98% complete with total volume over 151 mmt, of which includes 99 mmt of wheat, well above the USDA forecast of 90 mmt. Last week MM’s were net sellers of just over 10k contracts of KC wheat and nearly 19k contracts of Chicago wheat. The combined short position for all 3 classes surged to just over 183k contracts, within a few thousand contracts of the record large short position just over 187k. Winter wheat conditions improved 2% to 50% G/E, well above the 34% from YA. SovEcon forecasts Russian wheat production in 2024 will slip to just under 90 mmt, down from their 2023 estimate of 91.5 mmt.
SOYBEANS
The soybean complex was mixed with beans up $.15 – $.17, meal was $2 – $8 lower with bear spreading noted, while oil surged 140 – 190. Jan-24 beans traded above the 100 day MA resistance, however held below $13.50. South American weather continues to be a bit of a mixed bag. Net drying is expected to occur across the northern growing regions of Brazil thru the end of the week, however rains next week and into week 2 of December are expected to bring needed relief. Southern Brazil remains in a wetter than normal pattern with moderate the heavy precipitation every 3-4 days. Argentina is expected to see a good mix of rain and sunshine the next few weeks also bringing relief to recent dry pockets that have developed in the west and southern growing areas. The USDA announced the sale of 123k mt (4.5 mil. bu.) of soybeans to an unknown buyer. Last week MM’s were net sellers of just over 6k contracts of soybeans, net buyers of nearly 3,800 oil and 6,400 meal. The MM long position in soybean meal has swelled to 137,803 contracts, the largest since Mch-2023. As of Nov. 26th the EU has imported 4.44 mmt of soybeans, up 2% from YA. EU soybean meal imports have reached 5.96 mmt, down 11% from YA. The EIA Monthly Energy Review today showed combined biodiesel and renewable diesel production reached a record 411 mil. gallons in Aug-23, up 6.5% from July and up 45% from Aug-22. While these figures weren’t news to the market, it did provide a reminder of the rapid expansion of renewable diesel industry. Production reached 85% of capacity in Aug-23, up from 80% in July. Conab estimates Brazilian soybean plantings at 75%, vs. close to AgRural estimate of 74%.
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