Morning Highlights


Highlights

  • CHS Hedging has scheduled an Introduction to Technical Analysis class on January 10th, 2020. In addition, CHS Hedging will offer an Energy Class on January 23rd, 2020. To register for these classes please go to http://chshedging.com and click on the appropriate link to the class or classes you may be interested in attending.   
  • The Chinese Foreign Ministry stated today the President Xi and President Trump have been in touch the entire time during trade talks using various means. The U.S and China are working to finalize “phase one” of the trade deal and have it signed this month.
  • White House trade adviser Navarro stated on Friday that there will need to be three phases of the trade deal.
  • The November WASDE report will be released this Friday, November 8th, at 11 A.M CT.
  • The Brazilian Agriculture Minister announced that China has approved for the exports of pork innards to China from seven meat packing plants in Santa Catarina.
  • As of 7:00 A.M: Crude oil up .50 at 56.70, Dow futures up 123 points at 27,382, and the U.S$ index up 91 ticks at 97.330.                          

 Corn

  • Corn trading lower overnight due to harvest pressure, as weather allowed farmers to make decent progress over the weekend.
  • The Commitment of Traders report on Friday shows that corn specs were sellers again, adding onto their short position by just 700 contracts. Their net short position is now 133,600 contracts.
  • Harvest progress is expected to have reached 55% over the weekend as there were no major weather issues across the Midwest to slow down the farmers. Harvest progress was 41% complete last week, and 74% complete last year at this time.
  • A private analyst estimated the 2019 U.S corn production at 13.911 billion bushels, up from their previous estimate of 13.887 billion bushels. The analyst also increased their yield estimate to 170.0 bpa, previously at 169.3 bpa.
  • Spreads: Z/H 9 ¾ cent carry; H/K 6 ¼ cent carry; K/N 5 ¾ cent carry; Z/N 21 ¾ cent carry.

Outlook: Choppy trade ahead of harvest progress and the USDA report on Friday.

 Oilseeds

  • Soybean futures trading slightly higher overnight due to continued optimism surrounding trade talks and hopefulness that “phase one” of the trade deal will be completed this month.
  • The Commitment of Traders report on Friday showed that Soybean specs continued to be buyers last week, buying a total of 3,100 contracts. Their net position is now long 38,800 contracts
  • Decent harvest activity over the weekend is expected to bring the harvest progress up to 72% complete, compared to 62% complete last week.
  • A trusted industry source decreased their soybean crop estimate from 3.648 billion bushels to 3.593 billion bushels and lowered their yield from 48.1 bpa to 47.5 bpa.
  • South Korea’s Agro-Fisheries is tendering to purchase around 120,000 tonnes of non-GMO soybeans from optional origins.
  • Malaysian palm oil futures reached the highest levels since March 1st, 2018 due to tightening supplies and strong biodiesel demand. The Benchmark January contract up 2.9% at 2,532 ringgits per tonnes.
  • Spreads: F/H 12 ¾ carry, F/N 34 ¼ carry, H/K 11 ½ carry.

Outlook: Soybeans will continue to find some strength as the market trades optimism from trade war headlines.  

 Wheat

  • Wheat markets all lower overnight due to a general lack of fresh news to support the market.
  • The COT report on Friday showed wheat specs flipping back to sellers last week, selling 7,600 contracts. Their net short position is now at 19,900 contracts.
  • Cooler below average temperatures over the next 10 days are expected to cause the winter wheat crop to enter dormancy.  
  • Spreads: Chicago Z/H 6 cent carry; Kansas City Z/H 12 ¾ cent carry; Minneapolis Z/H 16 ¾ cent carry.

Outlook: Continue to see lower trade as the world supplies continue to increase and demand remains poor.