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Market Analysis

The trade is anticipating limited changes in the US 2022 corn & soybean outputs on the upcoming November 8 USDA crop report. The ongoing drought in the WCB has countered some improved rainfall in the Eastern US, but some disease reports have surfaced in the Ohio Valley prompting only minimal yield change this month. The Black Sea conflict remains the world’s biggest trade factor with the “food corridor” deal needing to be renewed by Nov 19. With tight US & world supplies, the Black Sea, S America’s weather, China’s import decisions, and the US and World political decisions and economic activity will be highly involved in deciding agricultural prices going forward.

Despite last spring’s wet weather delaying US plantings, summer Plains dryness expanding in the Midwest this fall has pushed the US corn harvest to 76%, 12 percent ahead of its 5-yr average. After 3 months of declining yields, Nov’s yield could slip another 0.9 bu drop to 171 bu because of lower western yields. However, one wire service trade average is unchanged at 171.9 bu. Domestic feed & ethanol demand appear solid, but oversea demand has been abysmal at only 46% of 2021 sales. The USDA has reduced its exports by over 300 million bu from last year with another 50-75 million possible this month. Given our 70 million smaller crops, corn’s stocks could tighten slightly to 1.152 billion next week.

Similar to corn, central US dryness has reduced bean’s yield prospects by 2.1 bu in the past 2 months to 49.8 bu; the lowest US average since 2019. Overall, Nov’s US output could be down 9 million or 0.1 bu lower yield while the trade’s average yield & crop size remains unchanged vs Oct. Current US export sales are slightly ahead of last year. However, both the trade & ourselves expect a 20-25 million cut in US exports given Brazil’s solid soybean planting pace so far this planting season. This suggests a 10 million higher US ending stocks of 210 million.

Given the current US export sales & Black Sea trade un- certainties, wheat’s US ending stock should be unchanged.

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What’s Ahead:

Russia rejoining the Black Sea food corridor deal, the high US dollar, world economic concerns, and ag demand destruction have all limited this fall’s price advances. Still looking to increase corn and wheat sales to 65% in December $7.00-7,20, $8.75-8.95 and $9.65-9.90 (KC) ranges after spot soybeans advanced to our nearby price objective of $14.50 earlier this week.

More By This Author:

Lower Soybean And Corn Crops Keep US Ending Stocks Historically Tight
Pre-October USDA Crop Production And Supply/Demand Report
Lower US Wheat Output And Smaller Corn Stocks