Morning Highlights


Highlights                

  • USDA December Supply & Demand report contained few changes from the November report. The next reports out will be the January S&D, and the Dec 1 quarterly stocks report, on Jan 10th.
  • December 15th is the scheduled date for additional US tariffs on Chinese goods to kick in. Comments from White House advisors say they are still on the table. However the markets are leaning towards seeing something get worked out.
  • News wires are reporting that House Democrats have reached a deal with the White House on the USMCA, and would clear the way for a vote soon. The Senate however, says the vote will not come until 2020.
  • CHS Hedging is offering Hedging, Technical Analysis, and Commodity Basics training classes coming in January 2020 [Jan 9, 10, & 14].
  • December futures expire Friday 12/13.
  • The Fed is meeting this week, most expect no change to interest rates.
  • U. S. Dollar index +.129 @ 97.540, Dow futures -13 @ 27,908, Crude Oil futures -.26 @ $58.97.

        

Corn

  • USDA left the US corn carryout unchanged at 1.910 bil bushels. However, world stocks were raised 4.6 mil tons to 300.6 mil tons, mostly on higher China production.
  • Argentine corn planting is said to be about 56% complete, close to normal.

 Outlook: pre-report trade was another yawner for corn. Post report trade was ditto. We saw a whopping .03 cent range for March corn, along with another low volume effort. USDA left corn exports unchanged at 1.850 bil – some anticipated a cut to the forecast. Calls: mixed to lower

 

Oilseeds

  • USDA left the US bean carryout unchanged at 475 mil bushels.
  • World soybean carryout was up slightly to 96.40 mil tons. However this was down from last year’s 109.8 mil.
  • Argentine bean planting is said to be 53% complete, lagging the average pace by 4 points.

 

Outlook: beans maintained a mildly technical supportive trade going into the report.  SF20 finished above the $9.00 level, closing at 9.01 ¼ . The market is anticipating some China sales announcements this week. Longer term dryness in Argentina could add support for bean bulls.  Calls: mixed to lower

 

 Wheat

  • US wheat carryout declined 40 mil bushels to 974 mil.USDA added 25 mil to exports, and cut imports by 15 mil.
  • World wheat carryout increased slightly, up 1.2 mil tons to a record large 289.50 mil tons.They did lower Argentina 1.0 mil to 19.0 mil tons, and Australia down 1.1 mil to 16.1 mil tons, while seeing slightly higher China, EU, and Russian production.
  • CCC will take offers on a donation tender of 60k tons SWW for Yemen on Thursday.
  • Egypt [GASC] bought 355k tons of wheat in their tender at an average price of $238.25/ton C&F. This was $2.50 higher than their last purchase. Origins were varied and included Russian, Ukrainian and French.
  • KWH20 and WH20 were higher yesterday, and put in outside higher reversals on the daily charts. MWH20 managed to close back above the 20 day moving average [$5.16] for the first time since early October.
  • Weekly deliverable stocks reports as of Dec 6th;KC 96.952 mil bu [-2.1 mil], Chicago 34.316 mil bu [-574k], MGEX 19.840 mil bu [-1.054 mil].A large drawdown in KC this time.

Outlook: wheat markets were mostly sideways in the early session yesterday. A small rally was seen after the lower carryout number was posted. We could be at a point where there are more speculative net shorts in Minneapolis than KC or Chicago! The MWH20 chart is starting to look technically inspired to rally. Calls; mixed to lower