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Grain Comments: 11-07-2023

Good morning.

Election Day!

The grain markets are mixed this morning, having bounced off the overnight lows. Soybeans have turned mixed with SF now near unchanged, SMH is up marginally while bean oil is marginally weaker. Corn futures are down 4-5 cents and wheat futures are down 2-3 cents.

CZ has been pressured on technical weakness after closing yesterday near the bottom of the day’s range. Overhead resistance is near $4.81-4.84, which signals the highs from last week as well as the 20- and 50-day moving averages.

SF shows an inside day on the daily chart. Yesterday’s high of 13.70 compares to the October low of 12.70 1/4, up nearly a dollar since the October 10th-11th lows.

The dollar index is higher for the 2nd day in a row and weighing on commodities. Crude oil is down $1.35, and gold is under moderate pressure, down $21/oz. The equity markets are under mild pressure with the Dow down 90 points.

Farmer selling improved on yesterday’s rally. South American weather remains on the forefront for soybean futures with too much rain in southern Brazil and too dry in central and northern Brazil. How much of the crop needs to be replanted and how much gets switched to cotton are the biggest concerns.

Today’s weather outlook for Brazil remains the same. The high-pressure ridge that has been blocking rainfall across northern Brazil stays in place. Meanwhile, a low-pressure system keeps an active weather pattern for southern Brazil. The forecast into the 3rd week of November keeps the current pattern in place.

NOAA’s 6–10-day outlook for the US Midwest is for temperatures to be well-above normal with a slightly drier than normal bias. The 8–14-day maps remain much warmer than normal but do show a wetter trend which should be beneficial for the river system.

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.

In addition to the WASDE report on Thursday, Conab will release their updated Brazil production estimates.

Yesterday afternoon’s Crop Progress report showed the US bean harvest wrapping up with 91% of the crop harvested, slightly behind last year’s pace of 93% but up from the 5-year average of 86%. The corn harvest came in at 81% complete, behind last year’s pace of 85% but ahead of the 5-year average of 77% complete.

Have a great day.


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