Written Commentary
CORN
Prices were $.01 higher for the day and nearly $.10 higher for the week as corn carved out a 4th consecutive higher close. Spreads turned lower following overnight strength that saw Dec-25/Mch-26 trade to a 6 month high at $.13 ¼. Next resistance for Dec-25 is the October high at $4.31 ¼. The BAGE reports Argentine corn plantings have reached 30%, up from 26% the previous week and above the historical average of 25%. With prices and spreads both firming this week, right as harvest passes 50% suggests to me the market senses yields are not living up to the USDA projections. Yields have varied greatly, particularly in areas most impacted by disease. History would suggest the USDA yield est. at 186.7 bpa is too high. Since 1990 the USDA has raised yields in August, only to lower them in Sept. (like this year) 8 times. In 5 of those years final yields were below the Sept forecast by an average of 5.3 bpa. The 3 years final yields were above the Sept est. was by an average of less than 1 bpa. At this point no telling when the next USDA production est. will be.
SOYBEANS
Prices were higher across the complex with bean up $.07-$.09, meal was $3-$4 higher while oil was up 25 points in choppy 2 sided trade. Spreads also strengthened across the complex. Nov-25 beans traded to a new high for the week in late trade. Next resistance at the 100 day MA at $10.26. Dec-25 meal stretched out to a 2 week high with resistance at $282. Yesterday Dec-25 oil rejected trade into new highs for the month, setting up the overnight weakness. Spot board crush margins jumped $.04 to $1.62 bu. finishing at a 5 week high. Bean oil PV slipped back to 47.7%. Prices drew support from Washington as the Trump Admin. continues to work at easing trade tensions with China. This afternoon the President stated he felt the US is in a strong position to discuss trade with China and confident a deal will be made that is good for both sides. Yesterday the EPA reported D4 biodiesel blending credits generated in Sept-25 at 660 mil., up 21% from August and the highest since Dec-24 suggesting a big rebound in renewable diesel production during the month. Bulls remain hopeful US can still participate in bean sales into China ahead of SA harvest early next year. At stake is roughly 8-10 mmt, or 290-365 mil. bu. for the Dec/Jan period. US farmers are storing all they can of this year’s harvest awaiting the outcome of Trump/Xi talks while also patiently waiting to see what the Trump Admin. financial aid package will look like. Also early next month the Supreme Court will take up arguments over whether the Trump Admin. use of tariffs were indeed legal, something the lower appellate court deemed were not. With usage and production data lacking due to Fed. Govt. shutdown, markets likely to be driven by social media posts and yield reports the 2nd half of Oct.
WHEAT
Prices ranged from $.01 lower to $.03 higher across the 3 classes as wheat remains a follower. Both KC and CGO have traded to new highs for the week, sadly however not too far removed from contract lows. The Grain Industry Association of W. Australia raised their production forecast for their region by 8.6% to 12.6 mmt. The BAGE held their Argentine production forecast at 22 mmt, vs. USDA at 19.5 mmt, however cautioned next week’s cold snap could impact production. The Rosario Grain Exchange production forecast is at 23 mmt. Ukraine’s 25/26 grain exports since July 1st at 7.9 mmt are down 37% YOY. Wheat exports at 5.6 mmt down 21%, while corn sales at 1.14 mmt are off 68%. Russia’s Ag. Ministry continues to try and stimulate wheat sales by slashing their wheat export tax 69% to 99.1 roubles/mt for the period ending Oct. 28th. With global inventories on the rise it’s difficult to expect much upside price potential.
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