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Grain Comments: 12-15-2023

Good morning and happy Friday.

CBOT futures have spent most of the night hovering around unchanged. Corn futures currently trading unchanged to a tick higher, soybean futures mixed, up a penny to down a penny, and the Chi wheat market trading either side of unchanged. Soybean products are quiet, meal up roughly $0.50 while bean oil also trades either side of unchanged. Outside markets were mostly higher with crude oil futures up $0.60/barrel, the Dow Jones index up 80 points, or 0.2%, and the US$ index also about 15 points higher. Gold and silver also followed through on yesterday’s higher trade so far overnight.

Soybeans and wheat have small 7-8 cent ranges, while corn has traded an even smaller 1-3 cent window. Further clarification is awaited out of the Argentine government, while banks in Europe yesterday pumped the breaks on a financial “all clear”. Ag markets are expected to see profit taking/position squaring today, as few want risk exposure to the South American forecast/political situation over the weekend.

This morning’s NOPA monthly soybean crush report is expected to show another strong month of soybean crush data. Trade looking for 186.0 mil bu vs 189.7 last month and 179.1 last year.

Corn futures continue to trade in the 20-30 cent window. More needs to be known about coming South American production before prices move one way or the other. Still feel producer would be a willing seller on a cash move back near $5 after the first of the year.

Planting progress in Argentina reached nearly 60% complete vs 43% a year ago and 59% on avg. Weather forecasts continue to be favorable for crop development, with showers projected over the weekend.

Soybean futures continue to trade in a broad $1 trading range between $13 and $14. The size of the South American soybean crop, and when it will be available for export, are the 2 main factors that will likely kick the market out of this range.

Word from some private crop tours in Mato Grosso yesterday is that yield losses are currently predicted in the 5-7% ballpark, which would equate to some 2-3 MMT’s. Mato Grosso is the number one soybean producing state in Brazil. Producers do note that immediate rainfall is necessary to keep these estimates intact.

The wheat market continues to be a product of managed money flows, with fund managers not showing much interest in lighting up their short position. Production out of Brazil, Argentina and Australia is expected to be down some 10 MMT’s combined, but trade not currently concerned with cheap Russian offers abound.

Weather forecasts did not see much change overnight, with weekend showers slated for Argentina and the US southern plains over the next few days, while Brazilian moisture is still seen showing up after next week.

Have a great day!

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