Morning Highlights


Highlights

  • Sounding like a broken record but very little fresh news this morning.The president continues to use the tariff threat against China if a deal isn’t signed by Dec 15 and the Chinese are optimistic that a deal will be signed.After two down days on the Dow, it is holding steady this morning.
  • According to a Bloomberg article, the Asian region is forecasted to have an additional 250 million people by 2030 or roughly the size of another Indonesia.With this growth it is estimated that an investment of $800 billion will be needed to sustainably feed this growth.
  • 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. First notice day for December futures is November 29th so with Thanksgiving the day prior, longs will need to be out of their positions on the 27th or risk delivery.
  • Weekly Export Sales Estimates being released this morning.Average guesses:
    • Corn400,000 – 900,000MT
    • Beans800,000 – 1,400,000 MT
    • Soymeal 100,000 – 450,000 MT
    • Soyoil5,000 – 25 000 MT
    • Wheat200,000 – 500,000 MT

 

Corn

  • Very little new with corn.Domestic demand is keeping the eastern basis levels firm while the west has tried to ease itself back to more normal levels.It is creating a few interesting spreads across the county.
  • As mentioned through the week, CZ corn is trying to hold onto the topside of the gap.So far it has held but just barely.With option expiration tomorrow and first notice day next Friday, there will be a lot of repositioning as the market officially enters the holiday season.If this support does not hold the next level of support is at $3.57.Why the gap level is so important is that it also a 38% Fibonacci retracement from the high of the Aug USDA report day to the low on Sep 9.

     

  • Spreads widened out a bit.CZ/CH at 10 ½ cents, CZ/CN at 22 cents.Seasonally, these spreads will narrow as we get past first notice day.

 

Outlook: Corn looks to open steady this morning.  Will be watching closely to see if the support at the gap level can be held.

 

Oilseeds

  • Soybeans are holding but had some difficulty yesterday as the session wore on.There is support at the $9.00 level so it may look to test that again.That would fill the gap that was made after the Nov beans expired.
  • Little new with beans as the market wants to see confirmation of the sales that are swirling around the market.Pretty wide range of guesses so the weekly export sales report will be watched closely.
  • The Bean/Corn ratio is currently at 2.46 which has eased a bit this week.Corn can hold steady if beans wants to cover the gap if the market decides to do that.Appears the market is comfortable with trading a 2.3 to 2.5 ratio for this winter.As we approach planting season this ratio may move around a bit if the market wants to attract additional corn or bean acres.
  • Meal is gaining this morning while soyoil is off slightly.The oil share has been leading the support since October.
  • Spreads are remaining wide. SF/SH at 14 cents and SF/SN at 38 cents.

 

Outlook: Calls are steady to 2 better as beans try to hold on to the gains.

 

Wheat

  • Wheat is seeing some support again after testing the support earlier in the week.It is now apparent that Chicago wheat support is at $5.00 and KC wheat at $4.16.Chicago fought through a resistance point of $5.17 ½ so if that can hold, it may have targets of testing the highs again in the upcoming few days.With Chicago already strong compared to KC and Mpls, any strength here will force the other two markets up.
  • Mpls again not having the love that Chicago has gotten.It is trying to hold onto the psychological support at $5.00 but the market continues to not care too much.
  • Corn/Chgo Wheat is trading at a mid-range .71 ratio so it appears to be looking for a direction.
  • Trade is very quiet as it appears as though the millers are well positioned going into the holiday season.Basis for good quality remains solid and looks to be for blending purposes.
  • Spreads holding this morning: Chicago Z/H 3 ¼ cent carry; Kansas City Z/H 7 ¼ cent carry; Minneapolis Z/H 14 ¼ cent carry.

 

Outlook: Calls are 1-2 higher.  Chicago looks to lead the other two markets this week.

 

 

CHS Hedging and Russell Consulting half-day conference is open for registration.

https://etmna.eventsair.com/chs-annual-meeting/2019-russell-non-client

Cost $50 for Non Russell Consulting clients

Wednesday December 4th:
Registration: 12:30 p.m. – 1:00 p.m. Conference 1:00 p.m. – 5:00 p.m.
Social reception: 5:30 p.m. – 6:30 p.m. Dinner: 6:30 p.m

Location: Hilton Minneapolis 1001 Marquette Ave. S.Minneapolis, MN 55403

Speakers and topics:
Dr. Ed Seifried, U.S. ag economy outlook.  Jim Weismeyer, Washington D.C. farm policy Chris Short, Crop nutrient pricing strategies Kent Beadle and Preston Zacharias, Market outlook (grain and livestock)