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Grain Comments: 11-06-2023

Good Morning

Soybeans are 12 to 13 cents higher this morning. Wheat is 4 to 5 lower, and corn is steady. Bean oil is higher, while meal is mixed. Crude is higher with the dollar steady. Equity futures are mixed to start the week.

January beans are pushing into new recent highs again overnight, building off a strong close from Friday. Jan. beans are now trading to their highest level since Sept. 15th. A strong technical close was noted on Friday, with January closing above the 50- and 100-day moving averages. The RSI is at 65 this morning, quickly closing in on being overbought.

Beans are being supported by weather concerns in Brazil. It was dry in southern Brazil over the weekend, but more rain is slated over the next 10 days. Replant has occurred in some spots, and more is likely. Center and north Brazil saw some scattered rains over the weekend, with the forecast calling for more of the same over the next week. Rain will fall in those areas, but soaking rains with wide coverage are currently not being discussed in the short-term forecast. Private estimates are starting to dial back their predictions for Brazil’s corn and bean crops. Argentina still has favorable growing conditions.

Wheat is lower this morning on the lack of export confirmations for U.S. wheat and continued shipments out of Ukraine. Corn remains stuck between higher beans and lower wheat.

The U.S. forecast suggests continued good harvest progress for the next week to 10 days. Some light rain is predicted mid-week, but totals will be light. Temps will remain seasonal to start the week but will cool off again by the weekend.

The dollar is mixed this morning but was sharply lower on the week last week. The DOW was up 5.1% last week, the highest weekly gain since last October. The S&P was up 5.9% last week, the highest weekly gain since last November. The lower-than-expected jobs report on Friday renewed talk that the FED may be done raising interest rates, which was cheered on by equity markets.

The USDA will release the November crop report on Thursday. The trade is expecting slightly higher corn production and steady bean production. Recent history would suggest that crops that get smaller in September and October are also likely to get smaller in November, so we will see if the trade is right on reversing the trend. Ending stocks are expected to be narrowly changed on Thursday. The trade is looking for slightly higher corn and bean ending stocks and steady wheat stocks. It is likely too early to see much change in South American production numbers from the USDA. Conab is out with Brazil production updates on Thursday as well.

Crude is up nearly $1.00 this morning. Both Russia and Saudi Arabia confirmed yesterday that they would honor voluntary oil output cuts through the end of the year.

Have a great day!

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