Agricultural Commodities Struggle

Wheat

Wheat Struggles to Find Upward Movement

• Wheat remains below the $5.7/bushel mark despite escalating tensions in the Middle East and drought concerns in the central US plains region.
• Despite lowering its 2024/25 production estimate, the USDA increased its ending-stocks forecast to 257.72 million metric tons, exceed expectations by 1.6 million tons.
• Average weekly exports in the US for October appreciated nearly +33% compared to the same period last year.
• The International Grains Council (IGC) also maintained its 2024/25 global wheat production estimate at 798 million metric tons.
• Forecasts for more rainfall in Argentina and Brazil are also supporting South American crop prospects, adding to bearish sentiment.

Prices Supported on Supply Turbulence

• Corn futures rose to $4.20 per bushel in October, reaching a two-week high amid strong demand and supply concerns.
• Export demand remained robust, underscored by amplified average weekly exports increasing +44% compared to last year.
• Current estimates show that corn bushels used for ethanol production are slightly below the USDA’s target of 5.45 billion bushels for 2024/25, however, ethanol production typically peaks in the summer when driving demand is highest.
• Additionally, supply disruptions in Ukraine and the Middle East further impacted the market, with concerns over exports from the Black Sea region contributing to global supply constraints and subsequent price increases.

Futures Plummeted amid 10yr Historical Harvest Rate

• Soybean futures dipped below $10 per bushel, nearing a two-week low amid abundant supplies from a record US crop.
• Average weekly exports for October outpaced +9.8% in comparison to same period last year.
• The USDA’s latest report indicated that US farmers are harvesting soybeans at the fastest rate in over a decade, reaching 89% completion, just shy of the 91% expected by analysts.
• Meanwhile, in Brazil, improved weather helped speed up soybean planting, which reached 36% of the anticipated area by October 24, an 18-point jump from the previous week.