MARKET COMMENTARIES

Morning Comments/Roy's (RJ O'Brien)

Morning Grain Comments - October 3,  2022


CORN:  Corn was higher overnight following the rally in crude oil as OPEC is talking about cutting production by 1.0 mln bpd or more.  US corn harvest though is keeping gains in check with clear harvest weather for most of the Midwest this week. Harvest progress is expected to be near 20% complete and only slightly behind normal.  Focus by US producers right now is on
soybean harvest.  Keeping the corn market supported is the tight ending stocks situation and the need to keep corn prices high enough to ration 600-800 mln bu of demand into next year.  Cost for rail freight remains high and record high barge freight.  Look for Dec corn to remain in a $6.75-6.65 support to $7.00-7.25 trading range.  Dec corn resistance 7.49 3/4
 
WHEAT:  Wheat prices are higher on follow through from Friday's friendly reports (lower than expected US production) with support from the higher energies and growing concern Russia will do something extreme as its forces are pushed back in parts of Ukraine.  Rosario Grain Exchange estimates fertilizer usage for wheat and corn in Argentina will drop 28% due to high prices,
current dryness and lower plantings (switched to oilseeds).  US winter wheat plantings are expected to be near 43-45% complete in this afternoon's progress report vs 36% normally.  Next major resistance for WZ toward $9.50 and then $10.00. 
 
SOY-COMPLEX:  Soybeans and soy oil are higher after mixed trade in soybeans overnight.  Soymeal is lower. US soybean harvest will be in full swing this week.  Harvest progress this afternoon is expected to be 18-20% vs 25% normally.  Interior soybean basis backing off at the processors in some locations though strong rail values keeping the crushers from backing away completely. Record high barge freight trading on Friday. The low water on lower Miss River has tows having to reduce both draft and width...some able to only haul 40% of normal due to restrictions and groundings. USDA August soybean crush will be out this afternoon with avg trade guess of 175.4 mln bu (range 174.0-176.0).  Estimates on soy oil stocks is 2.105 bln lbs. with range of 2.075-2.140 bln lbs.