Morning Grain Summary (10-18-23)
Quick Summary Of This Morning (10/18/2023) In Grains:
SOYBEANS: December soybean meal is moving higher for the fourth time in the past five days, with soymeal futures rising $40 per ton since 10 days ago. November soybeans have also risen for four of the past five days, finally breaking above $13.00 again. Rumors suggest that China may have bought from three to five U.S. soybean cargoes, with a purchase reported this morning. U.S. soybean meal sales are reported to be the highest in 20 years, at 10.7 mmt, as the U.S. picks up the slack from Argentina's soy shortfall due to drought. U.S. soybean export sales have left much to be desired, with Brazil being the dominant export force following their record-large crop. Brazil is looking at another record crop and a sharp rebound in Argentine production. Weather has been uncooperative in northern Brazil and the south, with severe drought in the north and excess rain in the south. Soybean oil has recovered and is up for the fourth time in five days, with surging domestic demand and the move up in crude oil supporting the market. Malaysian palm oil reached a six-week high early Wednesday. Better economic news from China is also a supportive factor. Wednesday morning, USDA reported private export sales of 132,000 metric tons (mt) of soybeans to China for delivery during the 2023/2024 marketing year.
WHEAT: The wheat market is experiencing a boost due to strength in other markets and rumors of possible export demand. Paris milling wheat futures have been higher for the fourth time in the past five days, but have been moving sideways for weeks. There have been rumors of additional Chinese interest in U.S. wheat, with U.S. soft red winter being even money to French wheat in the November through January period. China's wheat imports have increased by almost 54% this year, at 10.2 mmt. With Australian wheat production potentially falling by over 40% due to drought, China must look elsewhere for wheat needs. Indian wheat prices are the highest since February due to strong demand and tight supplies, and India may suspend its 40% wheat import tax to buy wheat. Ukraine is working hard to export grain despite constant Russian attacks. Tenders for wheat include Bangladesh for 50,000 mt and Japan for a combination of Canadian and U.S. wheat for 90,000 mt.
CORN: Corn futures are gaining momentum due to the soy complex's surge and the over $2.00 rise in crude oil futures. A proposed embargo against Israel of Iran's oil shipments has boosted crude oil prices. A bomb in Gaza killed both sides of the conflict, with both sides blaming each other. President Biden is in Israel meeting with Benjamin Netanyahu to offer support. The US forecast for late October and into November looks wetter, with traders expecting a 3% to 4% jump in ethanol production. Corn export demand is primarily focused on Mexico, with most of that coming from the US. US corn is more competitive to Brazil, but Ukraine corn offers are cheap, and China is buying from Ukraine. Brazil continues to dominate corn sales, with export group ANEC projecting October shipments to be 8.5 million metric tons. China has been a significant buyer of Brazilian corn, and the China economy has seen a boost after the third quarter GDP rose by 0.5% to 4.9%. December corn is in a mostly sideways trend, with a rally and close above $5.00 likely for further gains.
Sources: DTN, Reuters, Bloomberg