Morning Comments November 8, 2021


The markets are trying to recover this morning after seeing beans lose 40 cents, corn lose 15 and wheat finish down 6 on the week last week. 

This would make it the third month in a row where we've seen a break in values off from short-term highs as we head into a supply and demand update from the USDA. As we've talked about countless times in the last couple of weeks, soybeans definitely have their work cut out for them if they are going to convince investors they have a story worth buying.

Brazilian weather has been nearly ideal for two thirds of the country, with the area that has been driest seeing rains over the weekend, with more expected. The phenomenal start to the growing season so far is the exact opposite of what we saw a year ago, with industry experts anticipating some beans working their way into the export pipeline by Christmas--nearly 3 months earlier than we saw beans ready for export a year ago.

We continue to monitor what is taking place in far Southern Brazil as well as Argentina as La Nina is expected to continue to intensify in the coming months. It is important to remember though, due to export taxes and market structure, Argentina's weather will likely have more of an impact on corn values than anything as corn planting there is expected to expand at the expense of beans. 

Over the weekend we saw the House of Representatives pass the Biden Infrastructure Bill, sending it to the president to become law since it already passed in the Senate earlier this Fall. 

This bill, while easily confused with the Build Back Better Act, is not the same, instead it is looking to spend around 1.2 trillion dollars on roads, bridges, high-speed internet to rural areas, ports and other physical infrastructure projects. Whereas the Build Back Better Act is more social and climate driven. 

While the two bills were intended to be passed together as one big push by the administration, democrats relented, instead taking the 'win' of getting one side passed, as moderate dems wait for the Congressional Budget Office's analysis of Build Back Better on the U.S. debt. 

Though the administration had its win with the passing of the infrastructure bill, it remained quiet on just what its plan is when it comes to pressuring OPEC and lowering energy bills. Many had anticipated the tough talk we saw from the president and his representatives a week ago would result in a release of oil supplies out of strategic reserves, yet so far no such announcement or move has been made.

Oil is working to recover its losses from Thursday and push back higher as a result.

Looking ahead, we will get updated export inspection figures this morning at 11:00 a.m. Eastern. Traders are expecting to see another good week of soybean shipments with a potential uptick in corn as barge unloadings at the Gulf were a marketing year high last week. 

After the close we will get an updated crop progress figure with beans expected to be around 90% harvested, and corn thought to be just over 85% complete. The planting window for Soft Red Wheat has all but closed in northern areas, with snow expected across much of the Great Lakes into Ontario by the weekend. 

Interesting to note, funds or spec buyers piled into corn last week, with the largest week of buying we've seen since September 2020. The market action was far from friendly when it came to new longs, though another round of buying in energies could definitely help bring some strength back in the short-term.

Corn down 1-2

Beans down 3-4