Morning Wire


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 chshedging.com and click on the appropriate link to the class or classes you may be interested in attending.                            

  • First notice day for November Futures is Thursday October 31, 2019. Be out of long positions by the close of business on Wednesday October 30th if you do not want to risk taking part in the delivery process.

  • An early reminder, Daylight Savings Time ends this coming Saturday night. Fall back one hour on your clocks before your head hits the pillow that night. Yes, you get that hour of sleep back that you lost in the spring time!  

  • As expected, Alberto Fernandez was elected as the new president of Argentina over the weekend. Cristina Fernandez de Kirchner (the former president) will be Vice President which will lead to many questions from the Argentine farm sector as to policies the new leadership will bring. Remember, strict limits on corn and wheat shipments were in place during Kirchner’s two-terms from 2007-2015.

  • Wire stories continue to point to “great progress “ made with the Chinese on Phase 1 of a new trade agreement. Enough talking about it, the trade wants to see hard results after such a long- protracted trade ordeal.                                                                                                                             

  • A/0 7:30 A. M. Crude Oil @ down .19 @ 56.49 Dow Futures up 93 @ 26,998, U. S. Dollar Index down.0770 @ 97.749.   

            

Corn

  •  The COT Supplemental Report on Friday afternoon showed specs sold about 14,400 contracts last week to place their net short position @ approximately 132,900 contracts as of 10-22-19. Activity in the latter part of the week leads us to estimate the corn spec is now approximately short 138,900 contracts at the close of business on 10-25-19.                                                 

  • 134 delivery certificates were canceled on Friday bringing the total delivery certificate cancellations for the week to 199.                                            

  • Corn harvest estimations range from 40-45 % complete on the Monday afternoon Crop Progress Report. The 5-year average for corn harvest completion at this timeas is 61 %.                                       

Outlook: Not much new here. Harvest continued over the weekend in the western belt while the eastern belt continues to stay wet and see delays. Snow is expected this week in portions of the belt from Nebraska to Wisconsin. Sure looks like the 3.75-4.00 range will continue to be the fare for now.                                           

 Oilseeds                  

  • The COT Supplemental Report on Friday showed soybean specs had bought 14,400 contracts in the last week, placing their net long position @ approximately 35,700 contracts as of 10-22-19. Updated spec activity for the latter part of last week allows us to estimate the spec long in soybeans at 26,700 contracts at the close of business on 10-25-19. The Soymeal spec position was unchanged @ short 24,600 contracts on a week/week basis through 10-22-19. Updated activity as of the close on Friday 10-25-19 places the soymeal net spec position short 27,600 contracts. Specs bot 20,900 contracts of soybean oil through 10-22-19 to place their net long at approximately 51,900 contracts. Late week spec activity allows us to estimate soybean oil length at approximately 50,900 contracts at the close on 10-25-19.                                                    

  • Philippines bought about 120,000 tons of soybeans that are expected to be sourced from the U. S. for Jan.-March 2020 shipment.

  • IMEA reported that soybean planting in Mato Grosso is 64 % complete vs 42 % complete last week. Meanwhile, EMATER reported that RGDS has seen rains slow early planting but about 7 % is planted vs 3 % last week.

  • Soybean harvest estimations are between 64% complete on the low end to 68% on the high end for this afternoon’s Crop Progress Report. The 5-year average for soybean harvest completion is 76 %.                                                                                           

Outlook: Trade continues to be ultra-sensitive to headlines regarding potential Phase 1 trade agreement with China. With options off the board, trade will focus on harvest progress, daily sales announcements or lack thereof and headlines for direction. Overnight trade up 2-2 ½ cents.                                          

Wheat

  • The COT Supplemental Report on Friday afternoon showed wheat specs bought 20,200 contracts in SRW through 10-22-19 to reduce their net short position to 12,300 contracts. Updated activity through the balance of last week allow us to estimate the spec SRW position @ 11,300 contracts. In HRW, specs sold 3,000 contracts last week to place their net short position @ approximately 16,000 contracts. Late week activity was minimal so not much change in position for HRW specs as of the close on 10-25-19. Minneapolis specs are now short 2,900 contracts futures only and short 3,700 contracts counting futures and options.          

  • Philippines bought about 165,000 tons of feed wheat expected to be sourced from Australia. Prices paid were between $253.00-255.00/ton for shipment between December 2019 and February 2019.                    

  • Bangladesh purchased 50,000 tons of Russian wheat from Agrocorp @ $255.46/ton CIF liner out. Shipment is slated within the next 40 days. A similar tender for Bangladesh is to take place this Wednesday October 30th.

  • In an overnight auction, China sold 2,786 tons of imported wheat from their state-owned reserves. The amount sold represented just over 5 % of the total wheat offered at the auction.

  • Winter wheat planting is estimated to be 85 % complete on Monday afternoon’s Crop Progress Report.                                                                                                                                                                                                                 

Outlook: Winter wheat planting is progressing nicely, moisture for the newly planted wheat has been adequate so far, especially in Oklahoma and Texas. Snows are expected in Kansas and Nebraska this week. Flat price continues to move back and forth. Spreads remain interesting with KC gaining back a couple of cents on Chicago during the overnight trade-now showing around 93 cent premium Chicago. KC flat price down 3 cents and Chicago down 5 cent and Minneapolis down ½ cent in overnight trade.