Grain Comments: 12-08-2023

Good morning.

Ag markets are mixed to higher to start the day. USDA Dec WASDE report out at 11am central this morning. Key will be whether USDA follows in South American production cuts, with little change expected in the US balance sheets. Corn futures unchanged, soybean futures up 3-4 cents, and the Chi wheat market down 6-7 cents in light, pre-report trade. Soy products were higher, meal up a dollar and bean oil up roughly 20 points. The US dollar index up 20 points. Crude oil up $1.30/barrel. DOW futures 30-40 points lower. Overnight ag volume has been limited.

Price direction today will be determined by the WASDE numbers; typically, we don’t see a bunch of volatility following the Dec report.

Ideas that USDA may raise 23/24 soybean crush estimate due to increased demand for soybean oil, but trade believes this will be offset by lower exports if it happens.

Yesterday’s US weekly export sales report showed totals within trade expectations; Corn – 1.289 MMT’s (0.725-1.5); Soybeans – 1.518 MMT’s (1.0-1.8); Wheat – 0.356 MMT’s (0.250-0.800).

Monthly October export data was seen as bearish soybeans and supportive of corn; Exported 348 mil bu of soybeans in Oct, down 17 mil bu from Oct 2022 and the lowest Oct total since 2019. Exports to China were robust at 2.5 mil bu, but exports to the rest of the world were seen down 20% vs last year.

Corn exports for the month of October totaled 111 mil bu. Mexico’s Oct corn purchases totaled 71 mil bu vs 37 mil in Oct 2022.

South American weather continues to be fickle, with forecasting models having a hard time with the extended range forecast. Recent model runs showing prospects for 2″+ of precipitation in the North, have dissipated.

Today’s US unemployment report is expected to show an unchanged rate of 3.9% vs last month; this will further strengthen views that the Fed may be done raising rates for this cycle.

Putin’s recent, hastily planned trip to Saudi Arabia yielded fresh calls for OPEC+ production cuts. Crude oil futures have shunned the announcement and traded to new lows since its release.

Have a great day!