Good morning.
Overnight trade to start Thursday was significantly quieter than what was seen on Wednesday, as markets have more or less held onto their post-election moves. Corn and soybean futures are higher this morning, as buying has continued to emerge following the early morning sell-off yesterday, while most of the outside markets besides the dollar are following through on the moves seen on Wednesday. That soybeans were able to hold the contract lows despite all the surrounding bearishness was a positive development for the bull camp. We reiterate that there are more questions than answers surrounding Trump at this point, and one of the biggest questions short term is what happens with exports; do buyers load up on US corn and beans before Trump takes office, or has that business already occurred? This will be closely monitored into the end of the year. Corn futures this morning are trading 1-2 cents higher, soybean futures are trading 10-13 cents higher, and the Chicago wheat market is up 3-4 cents. Products are higher, soybean meal is up $4-5/ton, and soybean oil is up around 20 points. Outside markets are mixed, crude oil futures are down 40-50 cents/bbl, the Dow Jones index is up 80 points, and the US$ index is down 45 points. The S&P500 is up 15 points, and the NASDAQ is up 100 points.
This morning’s weekly export sales report for the week ending October 31st is expected to show corn sales in a range of 1.7-2.5 mmt’s, soybean sales in a range of 1.2-2.2 mmt’s, and wheat sales in a range of 250k-550k mt’s. 2025/26 corn sales are seen between 0-50k mt’s, and 2025/26 soybean sales are estimated between 0-100k mt’s.
For tomorrow’s November WASDE report, the trade expects the avg US corn yield to come in at 183.7 bpa compared to 183.8 last month, and the avg US soybean yield to come in at 52.8 bpa, compared to 53.1 last month. Total production are estimates are seen slightly lower for both crops.
US ending stocks are expected to come in slightly lower than October for corn and soybeans; corn ending stocks are estimated at 1.946 bil bu’s compared to 1.999 last month, and soybean ending stocks are seen at 532 mil bu’s compared to 550 last month. Wheat ending stocks are seen at 813 mil bu’s compared to 812 last month.
At the world level, corn stocks are estimated at 305.70 mmt’s compared to 306.52 last month, soybean stocks are estimated at 134.06 mmt’s compared to 134.65 last month, and wheat stocks are estimated at 256.79 mmt’s compared to 257.72.
Estimates of managed money positions this morning based on yesterday’s trade activity are showing fund traders likely flipped to a net-long position in corn futures over the past 24 hours. If accurate, this would be the first time funds are net-long corn since the week of August 1st in 2023.
Chinese customs data shows soybean imports in the month of October reached 8.087 mmt’s, which was up some 56% from the same month last year. Cumulative imports through the first 10 months of the year are seen at 89.94 mmt’s, which is up more than 11% from 2023.
Year/year increases in imports continue to illustrate both improving domestic crush margins, as well as a propensity to front-load beans ahead of Trump’s return to office in January. China’s yearly soybean import record was set in 2020 at 100.31 mmt’s, which is likely to be topped in the next two months.
Furthermore, on this point, the USDA’s ag attaché to the Asian nation on Wednesday raised its estimate of 2024/25 soybean imports to 104 mmt’s, up from their previous estimate of 103 mmt’s. USDA currently sees 2024/25 marketing year imports at 109 mmt’s.
Data from Brazil’s Trade Ministry shows exports of corn and soybeans in the month of October were down significantly from last year; corn exports at 6.406 mmt’s were down more than 24% from last year, and soybean exports at 4.710 mmt’s were down nearly 16% from last year. Notably, meal exports were up 23.6% at 2.368 mmt’s.
One other big development from Tuesday’s elections that is pertinent to the ag community was the vote-down of Summit Carbon Solution’s proposed carbon-capture pipeline in South Dakota, where more than 60% of voters voted to repeal a law that was meant to ease the approval of the project. Summit said they would be reapplying for permit on November 19th.
As if there weren’t enough fireworks in the currency markets on Wednesday, this afternoon’s Fed decision will likely further exacerbate the movement in exchange rate markets, as the US$ index is likely again in store for a volatile day. Odds still favor a quarter point as the most likely outcome (97.5%), but the other 2-3% chance has shifted to a half point cut, as opposed to no cut which was seen earlier in the week.
The Bank of England is also scheduled to meet and make a rate decision on Thursday, where here too a quarter-point is the most likely outcome according to investors and economists. This would be Britain’s second rate cut of the year, with the first since COVID seen in August.
Slightly drier conditions were seen through the Midwest on Wednesday, with a band of showers seen through the lower Mississippi Valley and up into TN/KY providing moisture totals of 0.01-1.5″ to a fairly small/localized area. Heavier rains were also seen in parts of GA and SC, while on the other side of the country, light rains of up to a half inch were seen in parts of NM/CO and into western KS/NE.
More rains are seen for all three of these areas into the weekend and early next week; totals in the southeast through Monday morning are estimated between 0.1-3″, the lower Mississippi Valley is expected to receive up to 5″ in some local areas but the band will be narrow, and the southwest will see 0.5-3″ generally speaking from N TX up into NE.
Week-two forecasts continue to show a wet bias for most all of the US into the back half of November, as this new wet pattern is showing no signs of abating over the short-term. As we’ve mentioned this week, increases in soil moisture are likely into the end of the month.
Temperature outlook for the Midwest continues to be mostly unchanged over the next two weeks; troughing in the western US keeps temps in this half of the country below average, while ridging in the southeast allows temps to remain seasonally warm into Thanksgiving.
Light showers fell across eastern Argentina on Wednesday, with totals generally no more than a quarter inch. Eastern Brazil was on the drier side, while western Brazil all the way down into Santa Catarina picked up rains of trace amounts to up to 1.5″ in some local areas.
Forecasts in the week-two period for Argentina continue to fluctuate and have again trended back drier this morning. The back-and-forth nature of the forecasts here is keeping confidence low, while there continues to next to no signs of any sort of pattern shift occurring in Brazil over the next 15 days.
Have a great day.
Grain Comments: 11-07-2024
Good morning.
Overnight trade to start Thursday was significantly quieter than what was seen on Wednesday, as markets have more or less held onto their post-election moves. Corn and soybean futures are higher this morning, as buying has continued to emerge following the early morning sell-off yesterday, while most of the outside markets besides the dollar are following through on the moves seen on Wednesday. That soybeans were able to hold the contract lows despite all the surrounding bearishness was a positive development for the bull camp. We reiterate that there are more questions than answers surrounding Trump at this point, and one of the biggest questions short term is what happens with exports; do buyers load up on US corn and beans before Trump takes office, or has that business already occurred? This will be closely monitored into the end of the year. Corn futures this morning are trading 1-2 cents higher, soybean futures are trading 10-13 cents higher, and the Chicago wheat market is up 3-4 cents. Products are higher, soybean meal is up $4-5/ton, and soybean oil is up around 20 points. Outside markets are mixed, crude oil futures are down 40-50 cents/bbl, the Dow Jones index is up 80 points, and the US$ index is down 45 points. The S&P500 is up 15 points, and the NASDAQ is up 100 points.
This morning’s weekly export sales report for the week ending October 31st is expected to show corn sales in a range of 1.7-2.5 mmt’s, soybean sales in a range of 1.2-2.2 mmt’s, and wheat sales in a range of 250k-550k mt’s. 2025/26 corn sales are seen between 0-50k mt’s, and 2025/26 soybean sales are estimated between 0-100k mt’s.
For tomorrow’s November WASDE report, the trade expects the avg US corn yield to come in at 183.7 bpa compared to 183.8 last month, and the avg US soybean yield to come in at 52.8 bpa, compared to 53.1 last month. Total production are estimates are seen slightly lower for both crops.
US ending stocks are expected to come in slightly lower than October for corn and soybeans; corn ending stocks are estimated at 1.946 bil bu’s compared to 1.999 last month, and soybean ending stocks are seen at 532 mil bu’s compared to 550 last month. Wheat ending stocks are seen at 813 mil bu’s compared to 812 last month.
At the world level, corn stocks are estimated at 305.70 mmt’s compared to 306.52 last month, soybean stocks are estimated at 134.06 mmt’s compared to 134.65 last month, and wheat stocks are estimated at 256.79 mmt’s compared to 257.72.
Estimates of managed money positions this morning based on yesterday’s trade activity are showing fund traders likely flipped to a net-long position in corn futures over the past 24 hours. If accurate, this would be the first time funds are net-long corn since the week of August 1st in 2023.
Chinese customs data shows soybean imports in the month of October reached 8.087 mmt’s, which was up some 56% from the same month last year. Cumulative imports through the first 10 months of the year are seen at 89.94 mmt’s, which is up more than 11% from 2023.
Year/year increases in imports continue to illustrate both improving domestic crush margins, as well as a propensity to front-load beans ahead of Trump’s return to office in January. China’s yearly soybean import record was set in 2020 at 100.31 mmt’s, which is likely to be topped in the next two months.
Furthermore, on this point, the USDA’s ag attaché to the Asian nation on Wednesday raised its estimate of 2024/25 soybean imports to 104 mmt’s, up from their previous estimate of 103 mmt’s. USDA currently sees 2024/25 marketing year imports at 109 mmt’s.
Data from Brazil’s Trade Ministry shows exports of corn and soybeans in the month of October were down significantly from last year; corn exports at 6.406 mmt’s were down more than 24% from last year, and soybean exports at 4.710 mmt’s were down nearly 16% from last year. Notably, meal exports were up 23.6% at 2.368 mmt’s.
One other big development from Tuesday’s elections that is pertinent to the ag community was the vote-down of Summit Carbon Solution’s proposed carbon-capture pipeline in South Dakota, where more than 60% of voters voted to repeal a law that was meant to ease the approval of the project. Summit said they would be reapplying for permit on November 19th.
As if there weren’t enough fireworks in the currency markets on Wednesday, this afternoon’s Fed decision will likely further exacerbate the movement in exchange rate markets, as the US$ index is likely again in store for a volatile day. Odds still favor a quarter point as the most likely outcome (97.5%), but the other 2-3% chance has shifted to a half point cut, as opposed to no cut which was seen earlier in the week.
The Bank of England is also scheduled to meet and make a rate decision on Thursday, where here too a quarter-point is the most likely outcome according to investors and economists. This would be Britain’s second rate cut of the year, with the first since COVID seen in August.
Slightly drier conditions were seen through the Midwest on Wednesday, with a band of showers seen through the lower Mississippi Valley and up into TN/KY providing moisture totals of 0.01-1.5″ to a fairly small/localized area. Heavier rains were also seen in parts of GA and SC, while on the other side of the country, light rains of up to a half inch were seen in parts of NM/CO and into western KS/NE.
More rains are seen for all three of these areas into the weekend and early next week; totals in the southeast through Monday morning are estimated between 0.1-3″, the lower Mississippi Valley is expected to receive up to 5″ in some local areas but the band will be narrow, and the southwest will see 0.5-3″ generally speaking from N TX up into NE.
Week-two forecasts continue to show a wet bias for most all of the US into the back half of November, as this new wet pattern is showing no signs of abating over the short-term. As we’ve mentioned this week, increases in soil moisture are likely into the end of the month.
Temperature outlook for the Midwest continues to be mostly unchanged over the next two weeks; troughing in the western US keeps temps in this half of the country below average, while ridging in the southeast allows temps to remain seasonally warm into Thanksgiving.
Light showers fell across eastern Argentina on Wednesday, with totals generally no more than a quarter inch. Eastern Brazil was on the drier side, while western Brazil all the way down into Santa Catarina picked up rains of trace amounts to up to 1.5″ in some local areas.
Forecasts in the week-two period for Argentina continue to fluctuate and have again trended back drier this morning. The back-and-forth nature of the forecasts here is keeping confidence low, while there continues to next to no signs of any sort of pattern shift occurring in Brazil over the next 15 days.
Have a great day.
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