Editor’s note: Catch Randy Martinson every Friday after markets close on the

Agweek Market Wrap

at agweek.com.

The grains put in a strong performance for the last week of November. The grains started the fifth week with losses due to reports of good weekend rains in Brazil. Selling was also tied to the upcoming first notice for the December futures contracts. By the time the Nov. 27 session ended, all three wheat exchanges were at new contract lows while December corn was at lows not seen since July 2021 and March and May corn were at new contract lows. Soybeans continued to be the best performer, but still slipped to end the session in the red, but only by a small amount. Soybeans were supported by the products (soybean meal and soybean oil) which all ended in the black.

The need to either cash out or roll December basis fixed contracts also weighed heavy on wheat and corn. The cost of rolling the basis ahead is the difference between the December and March futures contracts, which gets added to your current basis level. So, for example, if you have a December basis fixed contract on corn at 40 under, it will cost you 20 cents to roll to March, making your new basis 60 under the March.

The Nov. 27 USDA Crop Progress report was the last report for the 2023 crop year. Reports will now be monthly until April. The report was slightly negative as it put corn harvest progress at 96% complete versus 93% the previous week and versus 95% average. Sunflower harvest has finally caught up to its average pace. As of Nov. 26, 86% of the nation’s sunflowers were harvested versus 78% last week and 84% average. Winter wheat conditions improved 2% to 50% good/excellent, 35% fair, and 15% poor/very poor.

The grains put in a mixed performance on Nov. 28, with all three wheat exchanges pushing higher along with soybeans while corn struggled. A lower U.S. dollar supported wheat and soybeans. Technical buying was also evident in wheat as all three exchanges bounced off contract lows. Soybeans were supported by an export sale as well as from the return of adverse weather in Brazil. Corn just waffled around with fund long liquidation the main driver.

Russia’s Ag Minister is reporting Russia’s wheat harvest at 98% complete with this year’s wheat production expected to come in at 99 million metric tons, the second largest crop for Russia in history, second to last year. Seems hard to believe.

Planting progress continues to be delayed in Brazil and will likely result in much lower acreage for the second corn crop. The adverse weather has been enough that some analysts are now projecting Brazil’s soybean production to be at 155 million metric tons, 7 million to 10 million metric tons off of initial estimates. Brazil’s weather pattern is expected to do a complete 180 degree turn the middle of December, but a lot of damage could be done by the time the weather change occurs, it if occurs at all.

The grains put in a firmer session on Nov. 29, with all of the grains posting gains. Wheat was the leader while corn and soybeans took the entire session to decide which direction they were going to go, and only decided the last few minutes of the session.

Wheat was supported by rumors that Russia is considering banning wheat exports. This seems like a bit of a ploy as the Russian ag minister released a report showing Russian wheat harvest is 98% complete and estimated wheat production at 99 million metric tons, which would be the second largest wheat crop in history for Russia (next to last year). So, it seems a bit unreasonable that they would look at banning exports at this point.

Wheat’s strength was more likely due to the news that Australia received almost 8 inches of rain in 24 hours in the southern regions of the country. This will result in lower quality wheat and impact exports.

The biggest issue with wheat continues to be demand and although China has been in and bought a couple jags of wheat, more is needed. It is a good sign that China has bought wheat as China is the largest producer of wheat in the world, and if they are importing wheat, it means they need to import a lot of wheat.

Corn continues to struggle, more so from heavy stocks than anything else. A 2.2 billion bushel ending stocks estimate means corn really doesn’t have to do much. That being said, there is enough concerning news in the corn market regarding Brazil that is likely corn want to see a major sell off from here, but don’t look for corn to rally sharply higher either. Corn will likely continue to trade in a tight range for the rest of the year and once there is more concrete direction from Brazil on the safrinha (second) crop, corn will respond.

Soybeans are going to be completely on the whim of Brazil weather. Currently forecasts continue to call for hit and miss showers with temperatures remaining hot. The adverse weather is expected to continue for the next two weeks. Long term weather forecasts continue to show a major change in Brazil’s weather pattern by mid December. We will see.

The grains put in a mixed performance on Nov. 30, with wheat and corn higher while soybeans struggled. Overnight all of the grains struggled as all opened the night in the red and then proceeded to extend session losses throughout the night. By early morning all of the grains were sitting with heavy losses.

With the pressure of first notice over, the grains were able to start the session a little calmer. The big supporting news came from USDA’s weekly export sales report. All three of the grains saw huge sales for the previous week, with corn hitting a marketing year high for export sales. What makes this even more bullish, it was for the week of Thanksgiving. The sharply higher than expected export sales pace helped to give wheat a bounce as well as corn. Soybeans pace was also better than expected, but weather in Brazil trumped the friendly export sales pace.

As of Nov. 30, Argentina soybean planting progress was estimated at 46% complete versus 33% the prior week and 48% average. Corn progress was estimated at 46% complete versus 39% last week and 53% average.

BAGE is estimating Argentina’s corn crop condition rating at 26% good/excellent versus 15% last year.

USDA’s October crush report added support as although it came in close to expectation, it was an all-time high crush pace for any month. Octobers crush was estimated at 201.4 million bushels versus expectations of 201.1 million bushels.

As of Dec. 1, Brazil was reporting soybeans planting progress at 83% planted versus 75% last week and 92% average. The slowest region is the RGDS (10% of the production) which is 27% behind average. Producers made good progress last week though, getting 25% of the crop in the ground. The first corn crop is reporting planting progress at 95% complete versus 91% last week and 95% average.

Although cattle lost ground the last week of November, the size of the loss is getting smaller than the previous week’s loss. Hopefully, that means that the funds are getting close to ending their heavy selling pressure. From the peak in September to the lowest level this week, live cattle have lost close to $30 while feeder cattle have given back close to $60. Live cattle have given all of past year’s gains and are currently sitting at lows not seen in almost a year while feeder cattle have removed the past six-month gains.

To say cattle are oversold and in need of a correction would be an understatement, but at this point fund liquidation has its grip on the cattle market, and until they are done, cattle could continue to see pressure. Fundamentally not much has changed. Supplies remain tight and the economy seems to be holding together, so this selloff seems to be more about money flow than anything else. Pressure also came from another disappointing cash trade.

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