Corn is trading slightly lower to begin the week with little fresh news to go on. Over the weekend, Israel launched a ground operation into Gaza, but it hasn’t had much impact on the markets.
US export demand has been decent with sales and shipments up 24% from last year with Mexico picking up the bulk of business. In addition, domestic demand has been good with profitable ethanol margins and increased production.
The El Nino pattern in Brazil that is causing the dry weather pattern is delaying the seedings of soybeans which in turn could delay the planting of second crop corn.
Friday’s CFTC report saw non-commercials offsetting some of their short position by buying back 8,440 contracts which reduced their net short position to 100,430 contracts as of October 24.
Soybeans began trading higher in the overnight session but slipped into the open and are now slightly lower, led by weaker soybean meal. Despite escalations in the Middle East, crude oil has moved lower and has added pressure to the soy complex.
A significant portion of the support in soybeans lately has been from the explosive bean meal market which made new contract highs as exports are now expected to reach a record large 13.9 mmt by the year end, proof that the US did get business from Argentina’s short soy crop last season.
Soybean oil is under pressure from lower world veg oils and lower crude oil. Many analysts expect that further escalation of the war could cause crude oil to rally near 100 dollars a barrel.
Friday’s CFTC report saw non-commercials switching from a net short position to a net long one after buying 10,207 contracts which now leaves them net long 7,753 contracts.
Wheat began the day lower with KC making new contract lows, but the complex has since shifted with KC and Minneapolis higher, while Chicago remains lower.
Russia’s Ag Ministry is now forecasting their wheat crop at 93.0 mmt which is far above the USDA’s previous guess of 85.0 mmt. Russia also continues to dominate export sales.
In Ukraine, ships have begun moving through their Black Sea shipping corridor again after there was a brief pause in traffic due to potential explosives. Most of the products are headed to Europe and Africa.
Friday’s CFTC report showed non-commercials exiting a portion of their short position and buying back 12,153 contracts which reduced their net short position to 92,254 contracts.
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