Written Commentary
MORNING AG OUTLOOK
Lower trade across much of the Ag space this AM as the US midterm elections saw Democrats gain control of both the US House and Senate. The markets initial read is bearish as a lame duck Pres Trump for the next 2 years may lead China (and others) to not adhere to previous trade agreements on US Ag purchases. If nothing else, it provides speculative traders with further reason to shed length in the soybean complex. Even higher production estimates from StoneX add to the bearish sentiment. Energy prices are lower as the Democratic win improve the odds of ending the US/Iran war. Spot WTI crude oil is down $1.95 per barrel at $94.15. Spot RBOB and HO are both off $.06 per gallon. Widespread rain across central Midwest the past 24 hours as the current system moves from west to east. Showers will exit the ECB over the next 24-48 hours setting up a warmer/dryer outlook across the nation’s midsection into mid-month which should enable harvest to wrap up in a timely manner. Widespread precipitation across S. Brazil and Argentina the past 24 hours. Showers over the next week will favor the interior south of Brazil with only scattered rain for S. Argentina and WC Brazil. The US $$ is sharply lower, trading to a 5-week low. US equity markets have turned higher after an initial plunge overnight. Pres. Trump has stated he accepts the results of the election while maintaining he will “work with Democrats and we’ll get along very well with them,”
Corn:
Dec-26 has rebounded to unchanged at $4.42 ½ after reaching a fresh a 4-month low. Speculative traders unloaded another 12k contracts yesterday, reducing their long position to 51k. Open interest however was up just over 8k contracts. StoneX raised their 2026 US production forecast another 88 mil. bu. to 16.203 bil. with an average yield of 183.1 bpa, vs. the USDA estimates of 16.034 bil. and yield of 181.2 bpa. EIA data later this AM is expected to show ethanol production very close to the previous week’s 329 mil. gallons, just above the pace needed to reach the USDA forecast. The path of least resistance for now remains lower despite the improved demand to Mexico. The bulls hope that China buys US corn may be running out as the SA forecast remains non-threatening.
Soybeans:
Jan-27 beans are $.06 lower at $12.08, dropping to a fresh 2 ½ month low. Next support is at the Aug-26 low at $11.80 ¾. Dec-26 meal is down $1.00 at $317 while holding within yesterday’s range. Dec-26 oil is down 78 points at 64.50 after falling to a 7-month low. Yesterday’s net selling across the complex took the combined MM long position down to 367k, still historically large however below the recent record of 558k. Speculative traders continue to shed length as SA forecasts remain non-threatening. Crush margins have jumped $.11 to $2.25 bu. I estimate Chinese purchases are near 19 mmt. StoneX raised their 2026 production forecast another 77 mil. bu. to 4.725 bil. with an average yield of 55 bpa, vs. the USDA estimates of 4.562 bil. and yield of 53.1 bpa.
Wheat:
The shining star in the Ag space this AM with prices steady to $.03 higher. CGO Dec-26 is up $.01 at $6.00 ¾, Dec-26 KC is $.02 ½ higher at $6.39 while Dec-26 MIAX is up $.01 ½ at $6.21. Spot CGO and KC both held support above the summer lows while spot MIAX made a new contract low before recovering. O.I. in CGO was up 2.6k contracts while down less than 1k in KC. Prices will remain sensitive to Chinese demand interest, or lack thereof. The US, Russia and Ukraine have agreed to host tri-lateral peace talks in the UAE on Nov. 10th and 11th. Ukraine Pres. Zelenskiy has urged all parties to discuss a ceasefire on energy infrastructure and in the Black Sea region. Recent rains should enable further easing of drought conditions in the US plains. Ukraine’s Ag. Ministry reports 3.95 mil. HA of WW has been planted, representing 87% of the intended acres.
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