Ag Market View for Oct 3.22
Soybeans ended higher. Talk that Central Banks may not raise rates as high as feared may have rallied equities. Crude is higher on talk that OPEC may reduce production. Steep losses on Friday may have put futures in an oversold position. Weekly US soybean exports were 21 mil bu vs 31 last year. Season to date exports are near 65 mil bu vs 67 last year. Some feel final exports could be closer to 1,900 mil bu vs USDA 2,085 due to lower SA and prices and fear of lower China imports. Next key data will be USDA Oct crop report. Trade looks for USDA to increase US crop 40 miil bu. This and lower exports could add 200 mil bu to US 2022/23 soybean carryout closer to 400. Brazil is beginning to plant the 2023 soybean crop. USDA estimates the crop near 149.0 mmt vs 126.0 ly. One estimate today was near 154.0. Brazil is expected to plant 105.0 mil acres vs US 87.5. One group est US 2023 soybean acres at 88.9.
Corn futures ended higher with CZ near 6.80. Range was 6.72-6.87. Early calls were lower on concern over lower US export demand. US stocks rallied on talk that Central Banks may not increase rates as much as feared. This rallied equities and weighed on Dollar. Talk OPEC is going to lower production helped Crude oil futures. Next key data is USDA Oct 12 crop report. Some feel USDA could drop the corn crop 1-2 bpa or 170 mil bu. At the same time, some feel final US corn exports could drop 275 mil bu from USDA September estimate. Fact last week, US ethanol production was down and stocks were up. Some feel slowing demand for US corn could offer resistance to CZ near 7.00. Some still feel CZ harvest low could be near 6.40 if demand is slow and there is any increase in farmer selling. Over the weekend, Ukraine too over a town in Russia annexed Ukraine territory. What will Russia response be adds to uncertainty over Black Sea corn exports. Brazil 2023 weather is mostly favorable for corn. Argentina is dry. USDA est Brazil 2023 corn crop near 126.0 mmt vs 116.0 last year. Argentina is est near 55.0 mmt vs 53.0 ly. USDA est Ukraine crop at 31.5 mmt 42.1 ly with exports 13.0 mmt vs 26.0 ly. US corn export prices are above SA through Dec. Low US river logistics is weighing on basis.
Wheat futures ended lower. Matif opened higher trying to catch-up from Friday’s US closed but ended lower along with US futures drop. Reports that Russia may start providing trade finance to importers as an additional means to offset the sanctions which continue to slow their exports. September shipments could be below 4 mmt for a season total around 9.25 mmt. Financing may be in Rubles or local currency, rather than in US dollars. As Ukraine makes further in-roads into the territory annexed by Russia on Friday, the market waits to see Putin’s reaction. Word that Putin would not allow an extension of the Ukraine export corridor beyond November. The USDA estimate of US 2022 wheat crop offers support. Lack of demand for US exports offers equal resistance. GFS weather model calls for rains over parts of US south plains next week. EU model show rain but less coverage and amounts.
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