CHICAGO, Oct. 30 (Xinhua) -- Chicago Board of Trade (CBOT) agricultural futures consolidated in correction in the past week as the Federal Reserve may raise rates by another 0.75 percent in November and another 0.5 percent in December.
The European Central Bank also raised the lending rate by 0.75 percent last week. Such rates are expected to slow the outlook for global growth, Chicago-based research company AgResource noted.
As peak hawkishness on U.S. lending rates has not been found, and confidence in whether U.S. central bank can orchestrate a "soft landing" is declining, AgResource maintains a view of selling strong rallies amid slowing demand.
CBOT corn futures continued to consolidate, and the recent tight-range bound trade will likely continue nearby.
U.S. ethanol production margins were positive at 6.80 to 7.00 U.S. dollars. Due to logistical risks, Ukraine's access to marine exports is in jeopardy as vessel owners bypass the region. Argentine drought will likely stay in place into early winter amid ongoing La Nina. Yet, U.S. export demand is unlikely to improve into February, as the world cash market is unmoved by concern over Ukrainian exports in the future.
Brazil will remain the world's dominant supplier for another 60 days. Late planting in Argentina may allow producers there to avoid the worst of La Nina-based drought as some 65 to 70 percent of the crop will pollinate in February. Corn is fairly valued.
World wheat futures ended lower amid renewed dollar strength, a collapse in Egypt's currency and Russia's shipment of a season-high of 4.5 to 4.6 million metric tons of supply into the world market in October. A neutral trend remains most probable late into the year.
All markets remain subject to the push and pull of bullish supply and bearish demand outlook. Southern Hemisphere wheat production is in retreat following frost in Argentina this season and amid ongoing extreme drought. Australia remains plagued by excess rainfall and quality loss.
End-user coverage is advised at current prices. A test of 9.00 dollars for CBOT wheat is projected amid current supply concerns and likely a further drop in Ukrainian production from 2023 to 2024. But falling importer purchasing power and global demand contraction will cap rallies.
Soybean futures were slightly weaker at the end of a quiet week of trade. Market news and trading interest were limited as the U.S. harvest nears completion. The U.S. soybean harvest was 80 percent complete last week on a national basis. AgResource estimates that 92 to 94 percent of the U.S. soybean harvest will be completed as of Sunday.
Due to river logistics issues, the pace of U.S. soybean exports remains well behind last year. At the same time, estimated soybean processor margins are now at a historic 5.00 to 6.00 dollars per bushel, which looks to keep the U.S. soybean crush rate at full capacity.
Planting in Brazil continues to advance, and AgResource estimates that 44 to 47 percent of soybean crops in Brazil will be planted at the end of this week. With a record large Brazilian crop expected, AgResource maintains an outlook of selling strong rallies above 14.25 dollars for the soybean January contract. ■