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Grain Comments: 08.11.23

Pre-report positioning kept futures mixed overnight with corn 1-2 cents lower, soybeans 4-6 cents higher, and wheat down 3-5 cents. The US dollar was steady, energies were higher, and equities were mixed.

 

Today’s Reports: WASDE, Farm Program Enrollment

 

  • US more competitive in global market
  • 95% chance of El Nino this winter
  • Chinese typhoon causing quality concerns

 

The primary influence on today’s trade will likely be the release of the monthly supply and demand data from the USDA. What we will see this month as far as production has been heavily debated ever since the July data was released. For the most part trade is expecting to see a slight reduction in yield on both corn and soybeans from last month. The uncertainty on the domestic side is what will be done with demand. It is almost a given that any reduction to production will have an equal reduction in demand, especially on the soy complex. Heavier reductions to demand are expected in corn, especially on exports. While this data will be heavily focused on, the global side will get just as much attention. Nearly all projections on 2023/24 crop production in South America has increased from the July data was released. Brazil is expected to see corn and soybean production increase by 3 to 4 million metric tons each next year due to elevated plantings and better weather. Larger increases are forecast for Argentina, with corn production up 20 mmt and soybeans up 23 to 25 mmt as the La Nina drought comes to an end. This added production is reducing needs for large crops out of the United States.

 

Highlights

* Vessel line up in Brazil growing

* US seeing high soy product demand

* US credit card debt +$45 billion in 2nd quarter

* Large US banks expected to see downgrade

* Argentine peso incentive generates 6 mmt in corn sales

* US fall offers competitive with SAM

* EIA predicts 2023 average crude value of $83/bbl

* Importers report adequate fall coverage

* US vegetative levels record high

* Ukraine working to allow vessel loading

 

Corn

* US yield est 175.7 bpa, -1.8 bu from July

* US crop est 15.15 bbu, -167 mbu

* 22/23 carryout est 1.41 bbu, +8 mbu

* 23/24 carryout est 2.17 bbu, -95 mbu

* 23/24 world carryout est 313.7 mmt

 

Soybeans

* US yield est 51.4 bpa, -0.6 bu from July

* US crop est 4.25 bbu, -47.8 mbu

* 22/23 ending stocks est 252 mbu, -3 mbu

* 23/24 carryover est 263 mbu, -37 mbu

* 23/24 world ending stocks est 120.3 mmt

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