Morning Highlights


  • In their winter weather outlook, NOAA showed a strong probability of La Nina conditions through the winter months ahead, with a 65% to 75% chance.  La Nina winters tend to produce below average temperatures and above average precipitation across the northern Corn Belt, however no single La Nina produces the same outcome.   
  • U.S. equities along with the dollar index have traded lower late this week on uncertainty surrounding tax reform.  U.S. Senate Republicans revealed their tax plan on Thursday and it showed discrepancies from that of the House of Representatives. 
  • The next NAFTA meeting will take place in Mexico City on November 15-21.
  • Midwest benchmark propane prices are only $0.02375/gallon from notching a fresh 3-year high of $0.93375.  The reason for the strength has been a record export pace, which have driven inventories down 22% year over year. 


  • Front month corn broke out of its seven-week, 15 cent trading range yesterday by drifting lower post-USDA report and registering a fresh December contract low of $340’6 within five minutes of the settlement.  An overnight low was registered at $341.    
  • A surprise 3.6 bpa increase in corn yield from October’s official USDA estimate drove U.S. aggregated corn yield to a new record high of 175.4 bpa, now above last year’s previous record of 174.6 bpa.  This 2.1% boost to corn yield was the largest October to November adjustment since 1996.  The top two corn producing states of Iowa and Illinois both saw their respective state’s average corn yield up 6 bpa. 
  • The corn yield has been adjusted higher by 5.9 bpa since August’s estimate of 169.5 bpa. 
  • One supportive update to the corn market was yesterday’s combined old crop and new crop export sales of 2.939 mmt, a 5 ½ year high. 
  • Spreads: Z/H 13 ½ cent carry, H/K 8 ½ cent carry, Z/N 29 ¾ cent carry.

    Outlook: Weaker trade and fresh contract lows can be expected in the short term.


  • Front month soybeans traded a relatively wide report-day range of $0.2050 before ultimately settling down 2% yesterday.  The reason for the weakness was likely a result of the national average U.S. soybean yield left unchanged by the USDA at 49.5 bpa, whereas estimates were calling for a reduction to the yield for the second straight month.
  • With a record harvested area of 89.5 million acres, U.S. soybean production is slated to rise 3% year over year to a record 4.425 billion bushels. 
  • Chinese soybean imports were adjusted 2 mmt higher to 97 mmt, a new record. 
  • A Reuters article has been floating around, suggesting stricter import standards on GMO soybeans into China.  There has been recent delays in providing safety certificates (import permits) to a handful of inbound cargoes which could be a new headwind to import demand.  China currently buys 60% of global soybean imports, primarily purchasing from Brazil and the U.S.  It is interesting to note that as a result of the import uncertainty, Chinese importers are focusing on Gulf origin cargoes (55 days) over PNW cargos (17 days) in order to buy some time in obtaining certificates.   
  • As a result of this Chinese import issue, two major soybean crushers suspended operations today after failing to obtain import certificates.   
  • Moore Research allows us to share two seasonal trades each month.  Buying July soybeans on November 16th and unwinding this long position on December 28th is a winner in 15 of the past 15 years, yielding an average profit of $2,148. 
  • Spreads: X/F 9 ¾ cent carry, F/H 11 cent carry, F/N 28 ½ cent carry.

    Outlook: Fundamentally driven, negative price direction, with the potential for continued technical weakness if nearby support levels fail to hold.   


  • Wheat markets are trading slightly lower after this week’s relatively strong performance.
  • Nearby Minneapolis wheat is leading the charge this week, up $0.2325 so far and registering an 11-week high of $658 yesterday. 
  • The biggest takeaway from yesterday’s USDA report was U.S. all-wheat ending stocks tightening by 25 million bushels to 935 million bushels, the tightest stocks level in 3-years. 
  • Despite the tighter U.S. supply, world wheat 2017/18 ending stocks were larger than expected at 267.5 mmt, up 4% year over year and if realized would be considered a new record.  It is worth noting that world wheat ending stocks have registered annual records for four straight years. 
  • The USDA raised Russia’s wheat production estimate by 1 mmt to a record 82 mmt, up from 72.53 mmt last year.  The export estimate was also increased, by 500,000 mt to a record 33 mmt.  Russia is the world’s largest wheat exporter.  To provide perspective, the EU exports 28.5 mmt, followed by the U.S. at 27 mmt and then Canada at 21 mmt.    
  • Z/H Spreads: Chicago 16 ¼ cent carry, KC 16 ¾ cent carry, Mpls 9 cent carry.

Outlook: Weakness in the corn and soy markets will likely spill over into the wheat varieties.