Market Thoughts 11.15.21
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Corn Complex- USDA report out this week with US ending stocks right at market expectations and world numbers on the high end of guesses. Strength in corn this week led by continued confirmation of world wheat stocks levels making corn the easy proxy for feed and feedgrains fund buying. Rumors out late in the week with Chinese purchases of corn from Ukraine as it continues to fill in local harvests. Dalian corn futures posted highs matching their June levels. Chinese exporters have been notably absent in the US market for quite some time but continue to pick up tariff free US sorghum. Nearby ethanol margins have remained very strong with incentives for the industry to push run times as hard as possible.
Soybean/Canola Complex- Much of the trade looking for a higher bean number coming into report Tuesday but bears covering shorts with USDA indicating only slight increases in ending stocks in the US and on the low end of world estimates. Much of the rally late in the week was led by short covering out of the soybean meal complex. Meal also led the way as imported lysine prices have become expensive enough that meal is pricing more competitively into certain rations due its higher lysine content vs DDGS or other proteins. Canola followed with strength into week end with its already defined extremely tight carryout forcing the market to ration demand as the year continues.
Wheat Complex- Wheat values ended the week with new highs in KC and Chicago as market digested neutral US carryout and declines yet again in major world exporter ending stocks. Driving prices higher as well this week was continued strength in EU and Black Sea values and Russian export taxes adding costliness to additional exports from there. US values to continue to push higher as it tries to price away as much export demand until later in the sales season and other origin wheat stocks are exhausted.
Outside Markets- Dollar index strength has continued with index closing over 95 points its highest level since the summer of 2020. Equities continue to ride near record highs with quarterly earnings currently showing some minor disappointments. CPI (measure of inflation) continues to ride at extremely high levels.
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