Grain Comments: 11-03-2023

Good Morning

Ag markets this morning are continuing the mixed trade seen earlier in the week. Corn futures are slightly lower, wheat is little changed, and soybeans are higher. Soymeal and soyoil futures are also higher. Dow futures are indicating a steady opening for the stock market. Crude oil is up over $0.60/barrel. The U.S. dollar is weaker.

The soybean market was supported in part yesterday by rumors of Chinese interest in U.S. soybeans. There was talk that as many as 8 cargoes of beans were purchased with the beans to be sourced from the Gulf for February shipment.

Brazilian weather is also supportive to soybeans as southern Brazil is expected to remain wet for the next ten days while conditions in central and northern Brazil continue to be warmer and drier than usual.

Argentine weather has improved in recent weeks as soaking rains have fallen on key corn and soybean producing regions. The Buenos Aires Grain Exchange estimated that 23% of Argentina’s projected corn hectares have been planted.

The corn market continues to sag lower on a lack of any bullish news. Concern that the USDA will increase the U.S. corn yield in next Thursday’s crop report is a bearish factor.

The Fed’s Wednesday afternoon announcement that it was keeping its Fed Funds rate unchanged ignited a rally in stocks yesterday. The Dow closed 560 points higher and is on track to post its largest weekly gain of 2023.

Treasury yields were lower yesterday with the 10 year yield closing at 4.66% yesterday. The rate had topped 5% in October.

Crude oil also rallied yesterday with gains near $2/barrel despite news that U.S. crude oil production is at an all time high level.

Ukraine officials reported that Ukraine’s October grain exports were 20% higher in October than during September due to a new Black Sea export corridor. However, Ukrainian exports though the Black Sea are far less than pre-war exports.

Bunge expects that regulators will not force it to sell any assets it obtains in its $8.2 billion takeover of Viterra. The takeover will result in Bunge becoming the world’s second largest agricultural trading company by revenue.

Have a great day