Morning Comments November 28, 2023

Soybean Field Sunshine

Markets are trading higher overnight with beans probing yesterday’s highs as the market monitors whether the rains forecasted for Mato Grosso next week will materialize. Selling ahead of Dec. first notice day continues to be a bearish input for corn and wheat.

Russia’s ag minister estimated Russian grain exports this year at 65mmt. They also said wheat production was almost 99mmt (USDA 90).

Russia also said they might impose a ban on grain exports if their stocks fall to 10mmt.

Corn entered a downtrend with prices dropping to new lows yesterday. Support for March is below the market at 4.70 and resistance 4.80. The market is oversold after recent losses.

Beans dropped to new recent lows yesterday, but prices bounced from support to post a bullish doji on the charts. Support for Jan. is 13.30 and resistance well above the market at 13.50. The market is oversold after recent losses.

The forecast for the next week is mostly the same, with dry weather across northern areas of Brazil and rains for S. Brazil and Argentina.

The 6-10 is the period of focus with expectations for rains across the key growing area of Mato Grosso, which has been hot and dry.

Corn dropped to new lows to start the week with pricing and rolling of basis contracts against the Dec. contract weighing on the market ahead of Dec. first notice day. Look for the market to find a near-term low in the next couple days as pre-FND selling slows, but the market is lacking the catalyst for a major move to the upside unless South American production ideas start to drop considerably. Be patient with sales right now, but look for a 20-30 cent rally from lows to stall out.

Beans are at a critical spot with the market trading at support while also looking at a forecast that could have big implications for price movement. If the rains materialize in Mato Grosso, the market will likely seek out next support levels. Alternatively, if the rains disappoint, Brazil production estimates will start to drop, and prices could quickly recover to recent highs. Producers can buy inputs against unsold bushels to reduce downside exposure while maintaining upside exposure.

Corn up 1
Beans up 5-7