November 13, 2023
Agriculture markets continue to be dominated by historically high supply, keeping corn, wheat, and soybeans futures relatively low.
Wheat
Weekly gains for wheat, but supply is strong
- Wheat futures remain stuck below the $5.8/bushel benchmark, as strong supply expectations dominate the consensus. The weekly gain was +0.48%
- The weekly export sales report showed 354.3k metric tons of wheat was booked during the week that ended November 2nd. That was a 28% increase for the week and was 10% above the same week last year.
- Wheat ending stocks were raised 14 million bushels to 684 million as USDA left exports unchanged and raised imports 10 million bushels.
- In the European region, Ukraine’s agriculture ministry estimates that the country’s 2023 wheat harvest has reaped 823.1 million bushels so far, moderately below last year’s volume.
Corn
Three-year low for corn on increased global production
- Corn futures in the US dropped below $4.7 per bushel, the lowest in nearly 3 years amid record supply prospects.
- USDA revised the US top crop corn projections upwards to 15.23 billion tons in 2023/2024, more than a peak of 15.15 billion in 2016 and above analysts’ expectations due to improved yields.
- Strong supply data was a counterweight against weaker shipments to China since the latter opted to increase its sourcing from rival, Brazil.
- Furthermore, the global production forecast was also raised by 6.32 to 1,221 million tons (vs 1,160 million tons in 2022/23), as larger harvests for USA, Ukraine, and the Russian Federation compensated for the decreases in Mexico, Egypt and Indonesia
Soybeans
Soybeans remain below $13.5, amid strong ex-US producers supply
- Soybeans futures declined to $13.2 per bushel from a nearly 2-month high of $13.7 on November 8th, dragged down by increased US supply projections
- USDA raised its 2023-24 soybean production estimate to 4.129 billion bushels, exceeding October’s projection and analyst expectations
- Mixed weather in South America, along with sustained demand from China slowed further price drop.
- China’s soybean purchases in October increased by 25% from the previous year, and expectations indicate continued strong soybean imports by China in the fourth quarter, potentially setting a new 2023 record.
- Despite the erratic weather in Brazil, the local agency expects higher soybean production