Written Commentary
CORN
Prices were $.01-$.02 higher closing near session highs. For now Dec-25 remains stuck between its 50 day MA support at $4.15 and its 100 MA resistance at $4.23 ¼. Tomorrow’s USDA production and WASDE reports have been postponed or cancelled pending Fed. Govt. reopening. Ethanol production snapped back to 1,071 tbd, or 315 mil. gallons in the week ended Fri. Oct. 3rd, up from 293 mil. the previous week and up 3.2% from YA. Production was above expectations. There was 106.7 mil. bu. of corn used in the production process, or 15.25 mil. bu. per day, still below the 15.4 mbd needed to reach the USDA corn usage estimate of 5.60 bil. bu. In the MY to date there has been 492 mil. bu. used, or 14.9 mbd, an annualized pace of 5.439 bil. Ethanol stocks slipped to 22.7 mil. barrels, in line with expectations and above YA at 22.15 mb. Although implied gasoline demand rose 4.7% last week to 8.919 mbd, it was still off 7.6% from same week YA. Although export sales will not be released tomorrow due to Fed. Govt. shutdown, analyst estimates of sales last week range from 48–78 mil. bu.
SOYBEANS
Prices were higher across the complex with beans up $.04-$.07 ½ extending session highs near the close, meal was $1-$2 higher while oil was up 45-50 points. Bean and meal spreads firmed while oil spreads were weaker. dm Nov-25 beans closed into new highs for the month while also above its 100 day MA. Dec-25 oil also jumped to a 3 week high closing in on MA resistance just above $.52 lb. Spot board crush margins were little changed at $1.48 ½ bu. however bean oil PV improved to a 2 month high at 48.1%. Argentina’s Labor Ministry ordered the Oilseed Workers Union to suspend plans for a strike over wages and benefits, effectively putting a 15 day pause allowing for negotiations to continue. Union workers had called for a strike starting today. This potential work stoppage may have also contributed to the bull spreading. Malaysia’s Palm Oil Board is set to release its September data this Friday. Analysts expect production to have slipped 3.3% to 1.79 mmt. Exports are expected to have risen 7.7% to 1.43 mmt, resulting in stocks falling to 2.15 mmt, down 2.5% from the end of August. Despite no soybean sales on the books to China, sales to all other countries at only 404 mil. bu. (last available data) is also historically low, however still up 4% from YA and 9.5% above 2019/20, the last trade war with China.
WHEAT
Prices recovered late to scratch out a slightly higher close. None of the 3 classes established new contracts lows for their spot Dec-25 contracts. Dec-25 CGO premium to Dec-25 corn however fell to a new low at $.85 bu. After a slow start Russian exports in Oct-25 are expected to increase to 5.1 mmt, up from 4.6 mmt in Sept. Despite the increase they are still expected to come up shy of the 6.1 mmt shipped in Oct-24. Ukraine’s exports in the July thru Sept period at 4.7 mmt are also down 23% YOY. The slow sales from the Black Sea region have benefited demand for US wheat with YTD commitments (last available data before Fed. Shutdown) up 24% vs. YA vs. USDA forecast of up 5%. Expectations for Black Sea shipments to improved can’t be viewed as bullish for global prices just ahead of S. Hemisphere harvest.
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