Ag Prices Rebound From Oversold Conditions

MORNING AG OUTLOOK

Mostly higher trade across the Ag space overnight as prices rebound from oversold conditions.  Speculative traders have continued to pile out of the agricultural markets as demand remains no better than routine while supply disruptions from “Super El Nino” are absent.  Energy prices are mixed as tensions in the Persian Gulf remain elevated.  WTI Dec-26 crude oil is up $1.70 per barrel at $101.60, spot RBOB is steady while HO is down $.01 per gallon.  Scattered, light rains in the WCB and N. Midwest the past 24 hours while the central and ECB remain dry.  Light rain will favor the WCB and Great Lakes region the next few days before widespread showers fill in across the central and southern Midwest this weekend into early next week.  Above normal temperatures look to hold across the nation’s midsection through the 1^st full week of Nov. while a dryer outlook in the NW corn belt will improve the delayed harvest conditions in week 2 of the outlook.  Mostly dry across Brazil and Argentina the past 24 hours.  A mix of scattered rains and above normal temperatures will benefit plantings in Argentina.  Heavy rains in the interior south of Brazil may raise flood risk.  Welcomed scattered showers expected in WC growing areas.  The US $$$ is little changed after trading to a 2-week high.  Markets place over 90% odds the Fed will hold rates steady at the conclusion of today’s FOMC meeting.  US stock indices are mixed.

Corn: 

Dec-26 is $.03 higher at $4.51 ¾ after closing lower 4 consecutive sessions and 10 of the past 11.  Speculative traders sold another 12k contracts yesterday, reducing their long position to 126k.  Open interest however was up 19k contracts, an indication of fresh shorts entering the market.  EU imports as of Oct. 25^th at 7.11 mmt are up 36% YOY.  EIA data later this morning is expected to show ethanol production rebounded to 324 mil gallons last week, up from 322 mil the previous week.  The path of least resistance remains lower until US demand improves and/or a more threatening SA forecast.

Soybeans: 

Nov-26 beans are $.04 higher at $12.33 ¼ while holding within yesterday’s range and very close to its 100-day MA.  Dec-26 meal is up $.80 at $335.40 holding just above its 100-day MA support at $333.50.  Dec-26 oil is down 21 points at 66.50.  Crush margins are down $.06 at $2.34 ½ bu.  Chinese purchases likely rest between 18-19 mmt.  Sinograin is expected to auction off another 400k mt of soybeans next Tues. Nov. 3^rd.  Their last auction earlier this week sold only 172k mt, roughly a third of the total volume offered.  Soybean OI was down 6.5k contracts, meal was off 1.4k while oil was down 4.3k.  EU soybean imports as of Oct. 25^th at 3.79 mmt were steady with YA while meal imports at 5.65 mmt are down 15%.  Soybean plantings in Parana at 62%, Brazil’s 2^nd largest producing state, trail the YA pace of 71%.

Wheat: 

Prices range from $.01 lower to $.03 higher in 2-sided trade.  CGO Dec-26 is $.02 higher at $6.12 ¼, Dec-26 KC is up $.03 at $6.53 ½ while Dec-26 MIAX is $.01 lower at $6.27 ½.  All 3 classes reached fresh 3-4 month lows overnight before bouncing.  Hopes for peace in the Black Sea combined with trying to find a price that attracts demand has pressured prices this month.  Trilateral talks between US, Russia and Ukraine are slated for Nov. 10^th, meanwhile the fighting continues.  The lowest offer for Tunisia’s 100k mt wheat tender is just under $297/mt CF.  No reports on whether a sale has been made.  EU soft wheat exports at 9.21 mmt are up less than 1% from YA.

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