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By Jon Scheve, Superior Feed Ingredients, LLC
There are rumors circulating that China will relax COVID protocols in early 2023, which the market thinks will lead to a fresh round of commodity buying. This, combined with continued Chinese soybean purchases and export pace running slightly above USDA estimates, is giving beans some upside momentum.
Corn export pace long term continues to be a concern but hope rests with the feed category being able to make up the difference. Western basis values suggest corn futures are undervalued while the eastern market indicates the opposite.
The market continues to watch the Black Sea for more understanding of export capacity potential. The market rallied quickly when the door seemed to close, but then pulled back when it seemed to open again. War is difficult to predict, so this will be an area of risk in both directions moving forward.
There will be another USDA report on Nov. 9, but it is unlikely to change the market much. Barring any surprise changes to supply or demand should mean a continuation of its recent trading pattern.
November is usually a quiet time for the markets. It falls after the U.S. harvest is mostly over and before the weather in South America has a big impact on production, which will start at the end of December.
Please email jon@superiorfeed.com with any questions or to learn more. Jon grew up raising corn and soybeans on a farm near Beatrice, NE. Upon graduation from The University of Nebraska in Lincoln, he became a grain merchandiser and has been trading corn, soybeans and other grains for the last 18 years, building relationships with end-users in the process. After successfully marketing his father’s grain and getting his MBA, 10 years ago he started helping farmer clients market their grain based upon his principals of farmer education, reducing risk, understanding storage potential and using basis strategy to maximize individual farm operation profits. A big believer in farmer education of futures trading, Jon writes a weekly commentary to farmers interested in learning more and growing their farm operations.
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