Grain Comments: 11-02-2023

Good Morning

Ag markets are mixed again this morning. Corn futures are marginally higher, wheat is slightly weaker, and soybeans are firmer. Soymeal and soyoil futures are also higher. Dow futures are up roughly 118 points, while crude oil is up over $1.00/barrel and the U.S. dollar is weaker.

Deliveries against November futures consisted of 437 lots of soybeans and 124 contracts of rough rice. There were no meal or soybean oil deliveries. The bean deliveries came out of zone 5.

Yesterday afternoon the FED announced interest rates would be left unchanged but kept the door open to potentially raise them later to keep slowing inflation. The FED has now skipped a rate hike for two consecutive meetings, marking it the longest period without an increase since they began increasing rates in March 2022.

Tensions continue to run high in the Middle East, as air strikes and a ground campaign by the Israeli Defense Force remain ongoing.  In the Black Sea, Russia continues to drop mines onto Black Sea shipping lanes.

Rumors circulated yesterday that China may have purchased U.S. HRW wheat . There was also talk that a 50,000 mt U.S. soymeal sale was switched to S. America. Traders will be looking for confirmation.

China’s Q4 corn and soybean imports are projected to be record large. Reports indicate China will import near 12 MMT of corn and a record 105 MMT’s of soybeans. The bulk of these imports are expected to originate from Brazil.

Private firms are beginning to lower estimates for Brazil’s corn and soybean production, sparked by drought across N Brazil and flooding in their SE regions. Southern Brazil continues to be very wet for developing corn and beans. While the southern region is expected to see drier conditions this weekend into early next week, more showers are forecast mid to late next week. The Central areas in Brazil are forecast to see improved precipitation, which should help with soybean planting and establishment. Argentina’s scattered showers are expected to continue through today, producing better soil moisture for early bean planting.

The Panama Canal Authority has announced it will be scaling back shipping slots for vessels moving through the Canal even further from 32 ships per day to 25 per day during the first week of November. Further, from November to February ships through the waterway will be gradually reduced to 18 per day due to low water levels.

Have a great day!

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