Weekly market review
Weekly market review
Export sales for the week ending November 12th came in above expectations for corn and soybeans.
Corn sales totaled 42.9 million bushels, 18 million above the weekly total needed to reach the USDA’s estimate. This now puts yearly sales 392 million bushels ahead of the pace needed to reach the USDA’s recently increased target; but inspections have continued to trail behind. This makes the loading pace 126 million bushels shy of what is needed.
Soybean sales were reported at a marketing year low of 51 million bushels. Total sales still exceed the pace to reach the USDA’s target by a large margin. Sales are now exceeding the needed pace by a large 650 million bushels. Year to date sales amount to 1.885 billion bushels compared the USDA annual forecast of 2.20 billion bushels. With 41 weeks remaining in the marketing year, and only 190 million bushels forecasted in reserve, the soybean market will need to ration demand to keep from depleting the entire carryout.
Much of the weather focus has been on South America recently, but the southern U.S. Plains are still suffering from drought conditions. Much needed rain is forecasted for this coming weekend, keeping trade’s attention. Moisture would be very beneficial to the wheat crop heading into winter.
Weather in South America continues to add bullish news to the markets. Currently 1/3 of the Brazil looking good with rainfall amounts, 1/3 of Brazil is close to average and the last 1/3 of Brazil is dealing with extremely dry conditions, as well as parts of Argentina. Rainfall forecasts continue to remain scattered. Over the next few weeks, rainfall is expected to less than half the normal amount for a large portion of Argentina and Brazil.
After a slow start, planting in Brazil is now estimated at 70% complete, slightly above the normal pace. The firm Ag Rural estimates poor germination in parts of the country will lead producers to replant an estimated 740,000 acres. Moisture deficits remain, but overall they are less severe than earlier in the planting season. Most analysts have left production outlooks in Brazil unchanged, but weather will continue to be a huge factor in the weeks ahead.
Argentina planting is estimated at 20% complete, slightly trailing the average pace of 24%. Drought conditions and extended forecasts showing them to persist have lead several forecasters to reduce production estimates. Last week, the USDA reduced Argentina’s production 2.5 MMT to 51 MMT.
NOPA’s crush number for October was a record and well over trade expectations at 185.2 million bushels. Soybean oil usage is up 3.3% and meal shipments are 5.7% ahead of a year ago. Crush increased 6% over September and the USDA is projecting a .7% increase for the year. China’s hog herd has grown almost 27% over last year and sow herd numbers have improved 31.5% as the country rebuilds from African Swine Fever.
For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at firstname.lastname@example.org. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.
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