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Market Commentary for 11/4/22
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 November 9th, 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 US 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.
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Jon Scheve
Superior Feed Ingredients, LLC
