Morning Highlights


Highlights

  • The China trade negotiations continue but any agreement still appear to be a ways off.The US has set agricultural product volumes that China is somewhat concerned about since they feel it could negatively impact their other trade partners.
  • China has cut their short-term funding rate from 2.55% to 2.50%.First time they have lowered since 2015.
  • Dryness continues in Argentina, Brazil and the Black Sea regions.The 6-10 and 11-15 day forecasts are showing some signs of improvement
  • Dow continues to see support with levels breaking 28,000 this morning.
  • The signup period for the 1-year fall 2020 and the 2-year fall 2021 CHS Pro Advantage programs close December 11, 2019, for more information click: www.chshedging.com/chs-pro-advantage
  • Last trade day for December grain options is Friday, November 22.

 

Corn

  • Corn basis remain strong in the east in the east driven by domestic demand.Posted numbers in Decatur are +20Z while Cedar Rapids is still strong for harvest at -8Z but still a wide spread.Cedar Rapids basis have fallen 22 cents the past month while Decatur has firmed 10 cents over the same period.
  • Export sales still are slow at 584 TMT for week ending Nov 7.Sales Commitment so far this crop year are showing three key trade partners down significantly.YOY Japan is down 56% at 1.709 MMT, Korea down 96% at 75 TMT and Mexico down 17% at 6.344 MMT.
  • Spreads have widened ever so slightly.CZ/CH at 9 ½ cents, CZ/CN at 21 ½ cents.

 

Outlook: Futures traded in a narrow range overnight so looking for an unchanged opening unless there are any unexpected sales reported.

 

Oilseeds

  • Now that soybean harvest is largely complete, the market is looking to making sure it has enough supplies.Basis continues to do a lot of work.Since the beginning of the month, processors have firmed a good 20 cents through much of the region.
  • Board crush margins, while not as strong as earlier in the year, have firmed about 20 cents over the past few weeks.NOPA crush for October was much stronger than expected at 175.4 million bushels.Estimates were for 166.8 million.
  • Soybean export sales are on pace with last year.So far sales commitments are 22.275 MMT, up 1% from last year.
  • Spreads still fairly wide with SF/SH at 12 ½ cents and SF/SN at 35 cents.

 

Outlook: Another choppy day expected.  Unless there are some export surprises, beans will likely see difficulty seeing much enthusiasm.

 

Wheat

  • Wheat continues to see some pressure as it looks for support.Chicago is again testing the $5.00 support while KC is testing $4.15 to see if that holds.Farmer selling is very light so basis is doing much the work.
  • Quality seems to be the main driver as the market tries to blend its way to adequate supplies.
  • Mpls futures remain nearly at par with Chicago which is the indicator that protein is not the driver of this market.@kwz9-
  • Spreads this morning: Chicago Z/H 3 ½ cent carry; Kansas City Z/H 9 ¼ cent carry; Minneapolis Z/H 14 ¾ cent carry.

 

Outlook: Flat to 2 lower.  Trying to hold to the key support levels.  Any additional pressure with corn could push it down further.