Morning Highlights


Highlights

  • Crude oil is weaker this morning, trading lower by 75 cents at $56.88 in the January contract month.
  • RBOB gasoline futures are lower while natural gas trades higher at the time this was written.
  • The U.S. dollar is trading slightly lower and gold is stronger this morning.
  • Today’s StatsCanada crop production report will be released today at 7:30am CST.
  • The EIA energy stocks report will be released today at 9:30am CST.

Corn

  • The corn market is slightly firmer this morning, continuing to see range bound trade as direction is lacking due to little fresh news.
  • Grain lobby Coceral raised its estimate for 2017 EU maize production to 61.4 million metric tons vs. its previous estimate of 59.8 million metric tons in October.
  • Chinese corn futures were 3 cents higher overnight and since last Friday, the market has firmed by 10 ¼ cents.
  • In this week’s StatsCanada crop production report, traders expect total Canadian barley production to come in near 7.5 million metric tons, up from previous survey estimates of 7.2 million metric tons.
  • Spreads: Current spreads: H/K 8 ½ cent carry, H/N 16 ½ cent carry, N/Z 16 cent carry.

Outlook: Continued sideways trade with underlying support in feed/ethanol demand.  

Soybeans

  • Soybeans are firmer for the 4th straight session as the dryness in Argentina sees no relief in the next 7-10 days.
  • Trader’s concerns over Argentina’s soybean crop continue to grow as the weather remains dry this week with some hot days forecasted at the end of the week. Planting remains behind last year with somewhere near half of the expected planting area completed.
  • Overnight, Chinese soybeans were 3 cents higher, soy meal was 5.45 cents higher and soy oil was 14 cents lower. Malaysian palm oil was 15 ringgits lower.
  • In Reuters article, it estimated that only 19% of Brazilian farmers are self-funded, the lowest in almost a decade, due to lower margins. Some farmers are turning to a barter system in which crop input companies exchange supply inputs to farmers in exchange for a portion of their crops.
  • Spreads: F/H 11 ¾ cent carry, H/K 10 ½ cent carry, K/N 7 ¾ cent carry and N/X 21 ¾ cent inverse.

Outlook: Firmer as the market focuses on the weather forecasts for Argentina and Brazil.

Wheat

  • At the time of writing, the wheat markets are mixed with Chicago futures mostly lower while the KC and Minneapolis markets trade higher.  
  • StatsCan’s final crop estimates will be release today. According to reuters trade estimates, traders expect to see production of 28.0 million metric tons for all wheat, a 2.5 million metric ton increase over a StatsCan survey released in August.
  • Grain lobby Coceral raised its estimate for 2017 EU soft wheat production to 142.0 million metric tons vs. its previous estimate of 141.1 million metric tons in October.
  • According to Russian Agriculture Minister Alexander Tkachev, Russia still expects to export 45 million metric tons of grain in the 2017/18 marketing year which includes 35 million metric tons of wheat.
  • Spreads: Mpls H/K 6 ¾ cent carry, Kansas City H/K 13 cent carry and Chicago H/K 12 ½ cent carry.

Outlook: Sideways, range bound trade as the market awaits fresh news.