Written Commentary
CORN
Prices were $.05-$.06 higher closing at session highs drawing support from strength in soybeans. Spreads also firmed. Dec-25 stretched out to a 5 month high with next resistance at the June high at $4.50 ½. Support is at the 100 day MA at $4.19 ¼. Conab raised their 25/26 Brazilian production forecast slightly from 138.6 mmt to 138.8 mmt, well above the USDA Sept-25 forecast of 131 mmt. US exports for the week ended Sept. 25th at 55 mil. bu. brought YTD commitments to 1.069 bil. up 65% YOY, vs. the USDA forecast of up only 5%. Ethanol production slipped to 1,075 tbd, or 316 mil. gallons in the week ended Fri. Nov. 7th, down from an all-time high of 330 mil. the previous week and down 3.4% from YA. Production was at the low end of expectations. There was 107 mil. bu. of corn used in the production process, or 15.3 mil. bu. per day, just below the 15.36 mbd needed to reach the USDA corn usage estimate of 5.60 bil. bu. In the MY to date there has been 1.037 bil. bu. used, or 15.26 mbd, an annualized pace of 5.57 bil. Ethanol stocks fell to 22.2 mil. barrels, below expectations while above YA at 22.0 mb.
SOYBEANS
Prices were mostly higher today with soybeans up $.10-$.13, meal was $7 higher while oil backed off 35 points. Bean spreads firmed, meal spreads were mixed while oil spreads were unchanged. Jan-26 beans jumped out to a fresh 17 month high today despite still no indication of Chinese interest in US beans. US FOB offers at the Gulf are pretty close to Brazil thru year end however Brazil’s start to decline significantly early next year with the arrival of their harvest. Next resistance on the weekly chart for spot beans is $11.91 ½. Dec-25 meal shot up to its highest level since Feb-25 with next resistance at $334. Dec-25 bean oil fell back to its 50 day MA support at 50.29. Conab lowered their Brazilian production forecast slightly to 177.6 mmt, still just above the USDA est. from Sept-25 at 175 mmt. Conab’s export forecast at 112 mmt matches that of the USDA. Bean exports for the week ended Sept. 25th at 32 mil. bu. bring YTD commitments to 436 mil. down 37% YOY, vs. the USDA forecast of down 10%. Barring a weather problem in SA or much lower than expected US production. Perhaps the market is setting us up for significantly lower US production ? That would help explain why US offers quickly rose to Brazil’s offers to prevent large Chinese buying of US beans fearing that with expanded crush we’d run too tight ? In tomorrow data also look for a sizeable cut to bean oil usage for biofuel production with some shifting to either domestic usage or exports.
WHEAT
Prices were mixed and within a penny of unchanged across the 3 classes in 2 sided trade. Spreads in CGO and KC futures were mixed. Dec-25 contracts in both CGO and KC bumped up against their highs for the week while not able to pull far away from their respective 100 day MA’s. Conab kept their Brazilian production forecast just below 7.7 mmt vs. the USDA forecast of 7.5 mmt. The RGE did up their Argentine wheat production forecast another 1.5 mmt to a record 24.5 mmt, well above the USDA est. of 19.5 mmt. Tunisia reportedly bought 125k mt of soft wheat at just under $258/mt CF and 100k mt of durum at $323/mt CF. US exports for the week ended Sept. 25th at 12 mil. bu. bring YTD commitments to 513 mil. up 22% YOY, vs. the USDA forecast of up 9%.
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