Written Commentary
SOYBEANS
Soybean futures ended lower. Weekly US soybean exports were near 95 mil bu. Season to date exports are 471 mil bu vs 521 last year. USDA goal is 2,045 vs 2,158 ly. Some feel final exports could be closer to 1,950. Key is China demand and 2023 SA crops. USDA Nov report is Nov 9. Average estimate for US 2022/23 soybean carryout is 212 vs USDA Oct 200. Range is 150-296. Trade est World end stocks near 100.6 mmt vs 100.5 with ranges 99.0-102.2. China Jan-Oct soybean imports were near 73 mmt or down 7 pct from last year. Combination of strong domestic US soybean crush margins and sharply higher soyoil prices is offering support. Increase capacity for soyoil based renewable fuels is helping soyoil. B100 can be used as diesel fuel alternative. Diesel fuel stocks are low and prices near 5.40/gal. Brazil and Argentina are cool and dry. Forecast calls for warmer temps and normal rains.
CORN
Weekly US corn exports were only 9 mil bu. Season to date exports are 175 mil bu vs 241 last year. USDA goal is 2,150 vs 2,471 ly. Some feel final exports could be closer to 2,000. Key is Black Sea competition for US exports and 2023 SA crops. USDA Nov report is Nov 9. Average estimate for US 2022/23 corn carryout is 1,219 vs USDA Oct 1,172. Range is 1,059-1,390. Trade est World end stocks near 300.7 mmt vs 301.2 with ranges 289.0-306.0. CH remains in a 6.50 to 7.00 range until more is known about demand for US corn exports, 2023 SA crops and Ukraine export corridor deal. Matif corn followed wheat to lower on a lack of new news. Nov Matif futures expired at €329. Fob Atlantic offers remain around +15H for Jan-Mar and +18M for Apr-Jun, but with no markets for nearby Nov-Dec positions. EU interior markets are also mixed. Farmers like US are holding on to their lower crop. End users are reluctant to extend their coverage (like US) due to ongoing uncertainty over the demand due to culling of poultry due to avian flu, hog losses due to ASF, plus negative margins in most sectors. Besides lower US river navigation, there is a potential nationwide rail strike next week. SA weather is dry and cool. Brazil and North Argentina weather forecast suggest warmer temps and normal rains.
WHEAT
Weekly US wheat exports were only 6 mil bu. Season to date exports are 361 mil bu vs 364 last year. USDA goal is 775 vs 800 ly. Key is Black Sea exports and 2023 north hemisphere crops. USDA Nov report is Nov 9. Average estimate for US 2022/23 corn carryout is 1,219 vs USDA Oct 1,172. Range is 1,059-1,390. Trade est World end stocks near 266.9 mmt vs 267.5 with ranges 264.0-270.0. KWH remains in a 9.00 to 10.00 range until more is known Ukraine export corridor deal. Matif wheat began the week lower close making most of the losses in the final 30 minutes of trade. Egypt said they need to import just 1 mmt prior to next year’s harvest and that they had 5 months of stocks, GASC announced its first open tender since June today for LH Dec and FH Jan, at which French wheat was well off the pace set by Romania and Russia. None of the origins offered looked like they were discounting nominal replacement, with the 180-day payment clause. Algeria returns tomorrow for FH and LH Dec (note again how importers continue to try to cash in on the discounts of nearby Russian prices. Finally on the import front, after buying 150kt last week, Iraq is back for a nominal 50kt of US wheat only. Fresh demand in the EU is rather limited and traders are concentrating on executing existing business and making it through to the end of 2022.
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