11/14/2023 Markets Back Off a Bit, But Monday Surge Was No Fluke or Anomaly

On the Grains: Yesterday started out with lackluster weekly export inspections, particularly in the beans. Corn loadings at least fell midway in the range of expectations but wheat loadings came in near the low end and soybean loadings didn’t even reach the low end of expectations. The markets were very strong nonetheless for two reasons: First, these were actual loadings and not weekly sales. Those big bean sales to China won’t show up until Thursday’s weekly export sales report. Second, just as we’ve warned, attention is riveted on declining prospects for Brazil and the reality that U.S. ending stocks will still end the year at 8-year lows, despite the slight boost in last week’s WASDE report. After the close, we got the holiday-delayed Commitments of Traders report and it actually helped explain (in my view) the sudden pop in corn futures yesterday. Through last Tuesday, the funds had actually added another 24,156 contracts to their already large net short position, pushing it to net short more than 168,000 contracts. This was BEFORE the WASDE came out and funds likely only added to it after that. I think we saw the start of short-covering in corn yesterday. The jump in beans was even…