Morning Highlights


Highlights

  • Crude oil is stronger this morning, trading higher by 16 cents at $56.12 in the January contract month.
  • RBOB gasoline futures are stronger while natural gas trades lower at the time this was written.
  • The U.S. dollar is trading slightly higher and gold is weaker this morning.
  • Weekly export sales will be released at 7:30 AM CST today.
  • The December WASDE report comes out next week on Tuesday the 12th at 11:00 AM CST.

Corn

  • The corn market is slightly weaker in overnight trade as weakness in soybeans and wheat leaks into the market. Fundamentals remain bearish so traders will continue to focus on South America.
  • Ethanol continues to lend some underlying support to the corn market with robust production levels. Last week saw record breaking production and stocks are at their highest level since May of this year.
  • Chinese corn traded 3 cents lower overnight. Since last Friday, Chinese corn is 7 ¼ cents higher.
  • Talks about the impact of drought conditions in Argentina are on-going, with some traders noting that some of the planned corn area may go unplanted this season. In an average year, half of the corn crop would have been planted by the middle of this week.
  • Spreads: Current spreads: H/K 8 ¼ cent carry, H/N 16 ¾ cent carry, N/Z 16 cent carry.

Outlook: Choppy and range bound trade as the market searches for fresh news.   

Soybeans

  • Soybeans are weaker overnight, seeing follow through selling after hitting a 4-month high on Tuesday and a subsequent selloff yesterday.  
  • Palm oil was down overnight, making for four consecutive sessions of losses. The February contract settled at 2,503 ringgits per ton after the contract hit a 5 month low of 2,499.
  • Palm oil has declined 3.9 percent so far this week and is on its way to its sixth weekly fall in a row. Pressure from high oil stocks have seen palm oil futures fall by 10 percent since November 1st.  
  • Overnight, Chinese soybeans were 22 ½ cents lower. So far, Chinese soybean futures are 12 cents lower since last Friday.
  • Spreads: F/H 12 cent carry, H/K 10 ½ cent carry, K/N 8 cent carry and N/X 18 cent inverse.

Outlook: Weaker on follow through selling and varying weather reports with some indicating a slightly wetter 6-10 day Argentine forecast.

Wheat

  • At the time of writing, the wheat markets are mixed with Chicago futures mostly lower while the KC and Minneapolis markets trading on both sides.
  • The United Nations Food and Agriculture Organization raised its forecast for global wheat production to 754.8 million metric tons. This is a 1% decrease in global wheat production from 2016.
  • China auctioned off 11,882 metric tons of wheat at state reserve auctions today, finding buyers for only 2.59 percent of the wheat made available. The wheat was harvested in the 2012 crop year.
  • Bangladesh’s government approved the purchase of 50,000 metric tons of wheat in a tender that closed on November 28th. To the surprise of traders, the wheat will be sourced from South Korea rather than the expected origin of the Black Sea region.
  • Spreads: Mpls H/K 7 ½ cent carry, Kansas City H/K 12 ¾ cent carry and Chicago H/K 12 ¾ cent carry.

Outlook: Choppy trade with a bias higher on bargain buying.