Evening Report | November 8, 2023

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Soybean producers: Increase 2023-crop sales, start 2024-crop marketings... Soybean futures have rallied sharply over the past week-plus to their highest levels since mid-September. While there could be more near-term upside potential amid Brazilian crop concerns and increased Chinese buying, the rally is too strong to ignore. We advise soybean producers to sell another 10% of 2023-crop in the cash market. This pushes hedgers to 55% sold and cash-only marketers to 50% priced. We also advise all soybean producers to sell an initial 10% of expected 2024-crop production for harvest delivery next fall.

Ukraine says Russia struck civilian ship entering port in Odesa region... Ukraine said Wednesday Russia fired a missile at a civilian ship entering a port in the Black Sea region of Odesa. A crew member was killed and three were injured in the attack, as well as an employee of the port, Ukraine’s army southern operational command said.

UN chief says it will be difficult to revive Black Sea grain deal... United Nations Secretary-General Antonio Guterres told Reuters NEXT officials are still trying to revive the Black Sea grain deal, but it will be “difficult” for that to happen. Guterres said the goal would be to have Russia and Ukraine agree to allow freedom of navigation for each other, but admitted this was unlikely.

AgResource forecasts Brazil soybean production well below others... Brazil’s soybean production is estimated at 156.08 MMT by AgResource. The firm pegs Brazil’s corn crop at 123.5 MMT.  

Exchange cuts Argentine wheat crop estimate... Argentina’s 2023-24 wheat production is now estimated at 13.5 MMT by the Rosario Grain Exchanged, down 800,000 MT from its previous forecast. The exchange said heavy rains in recent weeks came too late for the country’s wheat crop. Wheat production is still expected to rise 2 MMT from last year’s drought-impacted level.

The exchange said rains will be beneficial for the country’s corn and soybean crops.

Brazil’s Petrobras tests use of soyoil as feedstock in refinery... Brazil’s Petrobras has for the first time processed 100% soybean oil in an industrial refining unit, the state-run oil company said. The test that used soybean oil as feedstock was carried out at its Riograndense Petroleum Refinery (RPR) in the southern Rio Grande do Sul state. It will allow RPR to generate “fully renewable petrochemical products,” said Petrobras, in what it said will open “a new world frontier for biorefining.”

RPR is preparing for the production of petrochemical inputs and renewable fuels such as LPG, maritime fuels, propylene and bioaromatics (BTX - benzene, toluene and xylene), used in the synthetic rubber, nylon and PVC industries, said Petrobras.

Beef exports slump to more than three-year low in September... The U.S. exported 231.5 million lbs. of beef during September, the lowest monthly total since June 2020. Beef shipments dropped 28.0 million lbs. (10.8%) from August and were 47.8 million lbs. (17.1%) below last year. Through the first nine months of the year, the U.S. shipped 2.315 billion lbs. of beef, down 383.7 million lbs. (14.2%) from the same period last year.

U.S. pork exports totaled 512.0 million lbs. in September, down 14.7 million lbs. (2.8%) from August and 4.1 million lbs. (0.8%) less than year-ago. During the first nine months of the year, the U.S. shipped 4.994 billion lbs. of pork, up 331.0 million lbs. (7.1%) from the same period last year.

Another HPAI confirmation in Iowa... The Iowa Department of Agriculture confirmed highly pathogenic avian influenza (HPAI) in Kossuth County, involving a site with 8,400 game bird pheasants, 16 peafowl and 160 commercial layer chickens. USDA on Nov. 6 confirmed HPAI was also found at a commercial broiler hatcher in Hamilton County, Iowa, with 15,000 birds. Over 1 million birds have been affected by HPAI in November (backyard and commercial operations combined), with a confirmation Nov. 3 of 940,000 birds in a commercial table egg layer flock in Wright County, Minnesota, accounting for most of the total.

USDA data reveals a total of 1.37 million birds in backyard and commercial operations combined were affected during October.

Fed’s Cook again raises concerns on global geopolitical developments... Federal Reserve Governor Lisa Cook delivered remarks in Dublin, Ireland, echoing points she made on Monday regarding potential geopolitical risks that could impact various sectors, including commodity markets, credit markets and the U.S. economy. Cook emphasized the resilience of the financial system, contrasting it with the vulnerabilities observed in the mid-2000s when other risks emerged. She highlighted risks outside the U.S., such as unexpected policy rate hikes by foreign central banks, the potential deterioration of China's economic slowdown, and increased tensions in regions like Russia/Ukraine, the Middle East, or China. Cook expressed concern that escalating geopolitical tensions could lead to reduced economic activity, heightened fragmentation in global trade and financial systems, increased financing and production costs and prolonged supply chain challenges, potentially contributing to inflationary pressures. However, she did not provide specific insights into how these external events might affect the U.S. economy and the direction of monetary policy.

It is evident the Federal Reserve is closely monitoring these external factors as it navigates its monetary policy decisions. Other Fed officials have also indicated uncertainty regarding the Fed's success in addressing inflation concerns. Market participants are eagerly awaiting comments from Fed Chairman Jerome Powell, with particular attention likely focused on a Thursday event where he may delve deeper into economic and monetary policy matters beyond his opening remarks at a Fed conference.

U.S. seeks to buy up to 3 million barrels for SPR for January delivery... The Biden administration is making efforts to acquire up to three million barrels of oil, scheduled for delivery in January 2024, to replenish the nation's strategic petroleum reserve (SPR), as announced by the Department of Energy. This procurement initiative is the second solicitation for January 2024 delivery, aligning with the department’s goal to make oil purchases at advantageous terms for taxpayers. In the previous month, the administration expressed its intent to acquire six million barrels of crude oil, slated for delivery in December and January.