OCTOBER 22 AFTERNOON AG COMMENTARY

by Steve Freed

SOYBEANS

Soybeans ended lower. Soyoil ended lower. Dalian soyoil and palmoil futures traded sharply lower. Over the last 2 weeks, nearby soybean have traded in a 11-84-12.51 range. Weakness linked to bearish USDA crop reports. Some even feel that US final soybean carryout could be closer to 500 mil bu vs USDA 320. This due to a higher US crop and potential for lower exports. Again today there were no new US soybean sales announced to China. Support has come from talk of high soyoil demand and near record soybean board crush margins. Soyoil is lower today. China was an active buyer of US soybean last week. US total soybean export  commit is still well behind last year pace. Brazil 2022 crop is off to a favorable start with plantings aheadof average. Argentina though is drier than normal. La Nina could keep Argentina and S Brazil drier than normal.

CORN

Corn futures ended higher. Talk of increase demand for US corn finally offered support. Over the last 2 weeks, CZ has been in a 5.06-5.38 range. Wednesday prices dropped on talk that a warmer than normal US winter could reduce fuel demand. Our weather guy disagrees with NOAA forecast. Normally, NOAA will forecast long range weather based on El Nino or La Nina. La Nina suggest a cooler than normal north US pattern. Over the last 3-4 years, NOAA has forecasted warmer temps due to climate change and overall warmer World temps. Corn should see higher ethanol and exports demand than USDA estimate which suggest a final carryout closer to 1,100 mil bu which could suggest CZ could test 5.42-5.46. Record high US corn plantings cost could reduce US 2022 acres. CZ22 is near 5.38 contract highs. Some feel higher energy prices could support higher corn prices. Most feel Crude could test $80. Russia corn export tax rallied and is near $49.70. Lack of supplies for EU corn imports could rally their domestic prices. US central Midwest could see 2.00-5.00 inches of rain over the next 5-7 days. This could lower production of unharvested crop there and delay harvest.

WHEAT

All the talk about lower World 2021/22 wheat milling supplies finally caught up to MWZ futures. MWZ ended near 10.13. Next resistance level on the monthly chart is near 11.10. Some had thought that most of the bullish news was priced in Minn wheat futures. Like oats and rapeseed they appears little selling near contract highs in Minn wheat. Russian wheat export tax hit $67 with some estimates could test $70 soon. EU wheat export has to slow down soon. All of this could increase World wheat prices. WZ 2 week range has been 7.47-7.59. Trade/close over 7.63 could suggest a test of 7.80. La Nina could keep US south plains drier than normal. KWZ 2 week range has been 7.50-7.75. 7.75 is new highs. Next resistance on weekly chart is 8.50.

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2021-10-22T20:28:43+00:00 October 22nd, 2021|