TFM Midday Update 11-20-2023

CORN

Corn is trading slightly lower today in quiet trade ahead of Thanksgiving and remains rangebound. Better chances of rain in Brazil have had little effect on prices so far.
Last night, libertarian candidate for the Argentinian presidency, Javier Milei, won the election, and traders are expecting a decline in the peso and large tax cuts as the country deals with massive 140% inflation.
While Brazil now has better rain chances through the rest of the month, temperatures have begun to soar and reach as high as 110 degrees in Mato Grosso, a main agriculture state.
With US corn futures near their lows, US corn is now the cheapest feed grain in the world, and exports have been strong running 33% higher than last year.

Soybeans are trading higher today despite scattered showers across South America and despite Javier Malei being elected in Argentina whose agricultural policies could pressure prices.
In the driest areas of Brazil, there have been many reports of farmers being forced to abandon their soybeans in favor of planting cotton or another crop in Mato Grosso.
In China, the General Administration of Customs has reported that October soy imports from Brazil were up 71% from the previous year at 4.8 mmt.
Soybean meal is trading lower today after becoming overbought recently, while soybean oil is higher with support from palm oil and good domestic demand.

Wheat is trading lower today on a lack of fresh news and continuously poor export sales. Russia’s wheat prices have been very cheap at $230 to $235/mt on an FOB basis.
Overall sales of US wheat are 7% lower than a year ago with sales for HRW even worse, and while the recent decline in the dollar should be supportive for exports, there has been little activity.
In Argentina, 25% of the wheat crop has reportedly been harvested, and the Buenos Aires Grain Exchange has dropped the estimated production to 14.7 mmt which is below the USDA’s 15.0 mmt estimate.
Friday’s CFTC report showed funds buying back wheat for the second week in a row, this time buying 2,951 contracts and reducing their net short position to 89,311 contracts.

Amanda Brill