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Grain Comments: 10-25-2023

Good Morning

Grain prices are steadily slightly lower this morning. Modest ranges continue to be the theme as yesterday was an active day for harvest. Resistance points of $5.00 for December corn and $13.00 for November beans have held strong this week. The lack of export confirmations of corn and wheat continues to weigh on those markets. Soybeans were higher yesterday, with help seen from a strong meal market.

December meal traded to a new contract high overnight. Meal had a $20 range yesterday before closing sharply higher. The strength was connected to prospects of better U.S. exports as Argentina is expected to dwindle on supplies. The ADM CEO stated yesterday that Argentina will be out of beans in November. The sharply higher meal trade helped push board crush margins higher as well. Overnight, the XZZ moved into new highs at $230.50.

Ethanol production for last week is expected to be slightly higher than the week prior. If realized, it would be the highest weekly production number in 5 weeks. Ethanol stocks are expected to be up slightly from last week’s estimate of 21.2 Mln. barrels. Ethanol margins continue to be profitable, especially considering the time of year.

China has been a buyer again this week of a mix of South American and U.S. beans. Corn and wheat export demand remains routine. There still has not been any confirmation of corn/wheat sales to China, which was rumored last week.

November options expire on Friday. First notice day for November futures is next Tuesday.

Rain is moving through the Midwest this morning, which will slow harvest in those areas again. Rain chances persist in a line from Texas to Wisconsin through Saturday. This will be followed by much cooler area next week. Frost/freezes are passible across the Midwest next week.

Heavy rains continue to plague southern Brazil. Rain chances do look better for central Brazil into next week. Argentina saw rains this past weekend, which is helping stabilize wheat conditions. A more active pattern of storms is expected in Argentina over the next few weeks. This increased precipitation more closely aligns with El Nino conditions.

The St. Lawrence Seaway is basically shut down as union workers went on strike this past weekend. There are currently no ships waiting to exit the seaway, but there are over 100 vessels waiting to enter.

The House will vote soon on the Republicans newest candidate to take over as Speaker. Representative Mike Johnson from Louisiana is up for a vote and needs 217 votes to be named Speaker. The House is awaiting a new leader so that it can take up pending legislation regarding funding of conflicts in Israel and Ukraine. Also, the next Government potential shutdown is Nov. 17th, so a new spending bill will need to be approved prior to that to avoid a stoppage.

The outside markets show crude and the dollar up slightly. Equities are mixed this morning. The FED meets next Tuesday and Wednesday. The current CME FedWatch Tool shows a 97% chance of steady rates.

Have a great day.

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