OCT 8 AFTERNOON AG COMMENTARY

by Steve Freed

SOYBEANS

The continued strong advance in global vegetable oil prices, plus news of another new all-time high for palm oil plus talk that China may be a more active buyer of US soybeans coming off their holiday helped to support higher trade. The buying pushed November soybeans up to the highest level since September 30. A higher close today for December meal would represent a key reversal and might suggest a technical recovery bounce. December oil put in a peak early in the session and the market has traded well off of the highs and back to near unchanged on the session. Malaysia palm oil gained 10.2% on the week. Positioning ahead of the USDA Crop Production and Supply/Demand report next week helped to keep trade choppy. Outside market forces were mostly positive with a break in the US dollar and continued strong gains in the energy sector helping to support. Traders see US ending stocks near 300 million bushels (161-373 million range) as compared with 185 million bushels in the September report. Traders expect production to come in near 4.415 billion bushels (4.374-4.466 billion range) as compared with 4.374 billion bushels in the September update. Traders expect yield to come in near 51.1 bushels per acre (50.5-51.5 range) as compared with 50.6 for the September update. World ending stocks are expected to come in near 100.72 million tonnes, (96-103 million range) as compared with 98.89 million in the September report.

CORN

December corn managed to trade higher on the session after choppy two-sided trade early. The rally was limited as traders await USDA news next week on crop production and supply/demand. Mexico officials see 2021 corn imports may likely exceed 19 million tons which would be a new all-time high for corn imports and compares with near 16 million tons last year. A mixed weather forecast with some areas of the Midwest getting enough rain to slow harvest activities helping to keep selling pressures somewhat at bay. Strength in the energy complex plus weakness in the US dollar are seen as positive outside market influences. Weakness in wheat has been offset by strength in the soybean complex. Traders are monitoring the China harvest situation closely as too much rain in certain areas of the north have disrupted harvest and might cause quality issues. For the USDA Supply/Demand update next week, traders see US ending stocks near 1.432 billion bushels (1.238-1.568 billion range) as compared with 1.408 billion bushels in the September report. Traders see corn production near 14.973 billion bushels (14.788-15.188 billion range) as compared with 14.996 billion bushels in September. Yield is expected near 176 bushels per acre, 174-178.5 range, as compared with 176.3 in the September USDA update. World ending stocks are expected near 298.76 million tonnes (295-303 million range) as compared with 297.63 million in the September update.

WHEAT

December wheat remains in a short-term corrective mode and continues to push lower over the past several days. The market is trading moderately lower on the session into the midday and the selling push the market down to the lowest level since October 1. December Kansas City wheat is trading at the lowest level since October 1 as well while December Minneapolis wheat posted a new contract high for the third session in a row, and is trading higher into the midday. Rain in the short term forecast for the eastern half of Kansas is seen as beneficial to recently planted crops, and traders see European Union plantings with expectations that the crop area will be steady the slightly larger than last year. For the USDA Supply/Demand update next week, traders see US ending stocks near 576 million bushels (470-615 range) as compared with 615 million bushels in the September report. World ending stocks are expected to come in near 280.82 million tonnes, 278-284.5 range, as compared with 283.22 million tonnes from the September update.

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2021-10-08T18:51:28+00:00 October 8th, 2021|