Morning Highlights


Highlights

  • NATO summit in London.
  • News outlets have headlines about a US/China trade deal possibly being close.
  • Outside markets as of 7:00 AM Central: January crude is $1.00 higher; gold is down $1.10, DOW futures are 142 points higher, S&P futures are up 14 points and the US Dollar index at 97.671 is down .066. 

Corn

  • Corn has traded fractionally mixed overnight, so far unable to garner any strength from the soybean or wheat markets.
  • News is mostly routine though there is new optimism that a trade deal with China may be closer than many believe.
  • US FOB export offers remain well above Russia FOB offers but are competitive against Argentina and Ukraine offers. South America exports remain record strong while US exports are well off the current projected USDA estimate.
  • Managed money funds are estimated net short 110k and have trimmed that position slightly over the past week.
  • Secondary US rail freight markets are weaker, which could result in firmer basis levels enticing movement from the US farmer.
  • Remaining US harvest will continue to be slow, hampered by wintery conditions and poorer than normal test weight in many regions.
  • There were 129 corn deliveries: Spreads are mostly steady after weakness yesterday: H/K 5 ¾ cent carry; K/N 4 ¼ cent carry and N/Z is 1 cent carry. 

Outlook:  Trading steady with no clear direction 

Oilseeds

  • Bloomberg is reporting that the US and China actually move closer to a trade deal and that US negotiators expect a phase one deal by the Dec 15 tariff deadline for additional US tariffs.
  • SF sees a new daily high for this week as a result but remains at the bottom side of the trading range.
  • Technically, SF has come close, but, so far, the September low of $8.65 is support.
  • China’s November imports from Argentina, Brazil and the US were quite strong. South America exports are expected to slow ahead of their new crop as the old crop supply dwindles.
  • Brazil weather is generally favorable with rain and additional rain forecast over the next 10 days. Crop production estimates are likely to rise if the weather holds with 128mmt being whispered as the top-end possibility
  • Deliveries: 319 soymeal contracts, 578 contracts soyoil.
  • Malaysian palm oil traded 26 ringgit higher in overnight trading. China’s Dalian beans were also stronger overnight.
  • Spreads: F/H 14 ½ cent carry; H/K 15 cent carry; F/N 43 cent carry. 

Outlook: Trading 2 to 5 cents higher but showing signs of fading 

Wheat

  • The wheat markets are higher overnight but remain choppy day to day and unable to establish a clear direction though MGEx has been trending lower the past 30 days while Chicago SRW and HRW have been trending higher.
  • Yesterday Egypt’s GASC bought 295tmt Russia wheat. Japan has issued its regular food-grade tender.
  • Australia is harvesting and smaller production is likely factored in.
  • Stats Canada’s next production report is scheduled for Friday Dec 6.
  • Spreads: Chicago H/K 4 ¼ cent carry; Kansas City H/K 7 ½ cent carry; Minneapolis H/K 8 ¾ cent carry.
  • Deliveries: 11 contracts KC, 0 Chi, 65 MGEx. 

Outlook: Trading better across all three markets