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 tomorrow, October 31, 2019. Be out of long positions by the close of business on today, 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! 

  • Daily Price Limits for Grains and Oilseeds will reset on November 1st. Soybean daily limit will drop to 60 cents from 65 cents to be the only real change most folks will take notice of.    

  • Talks between the U. S. and China continue as they try to hammer out an agreement of Phase 1 of the deal. Wire stories this morning point to a major sticking point being the amount and timing of purchases of American farm products the Chinese will make. The Chinese are said to be balking @ the $50 billion figure that President Trump has advertised and the Chinese would like to base their purchases on market conditions at the own discretion.                                                                                                                                  

  • A/0 7:30 A. M. Crude Oil down 25 @ 55.29 , Dow Futures down 8 @ 27,034, U. S. Dollar Index down .370 @ 97.644.   

            

Corn                                                

  • Taiwan purchased 63,000 tons of corn, mostly likely of Brazilian origin in a tender that closed late Wednesday. The tender included origins of the U. S., Brazil and South Africa, however Brazilian corn was believed to have been the only offer. CHS was the seller @ 1.48 c&f +CH20.

  • Shipment is slated to occur between Jan.9 and Jan 28, 2020.                                              

  • South Korea’s MFG (Major Feedmill Group) has issued a tender for up to 140,000 tons of optional-origin corn. Tender deadline is today Oct. 30. Shipment is in two consignments on March 1 and March 10, 2020.  

  • The EPA will hold a public hearing today in Ann Arbor, Michigan on the Trump administration’s proposed biofuels plan for next year. Both the oil and corn industries are expected to be boisterous in support of their particular positions on the issue while arguing against the position of their opponent.                                             

Outlook: Corn market maintains its posture between 3.75-4.00 basis the CZ19. Harvest will be slowed over the next few days due to rain and snow, particularly the eastern belt, but extended forecasts offer colder, drier weather for harvest on the horizon.                                           

 

Oilseeds                      

  • Palm oil futures continued to move higher overnight hitting an 18-month high on expectations of lower production and strength on the Dalian exchange.  The benchmark January contract closed @ 2,496 up 79 ringgits.  

  • Plenty of uncertainty continues about when Phase 1 agreement might be signed between the U. S. and China. Wire stories yesterday seemed to indicate the possibility of a delay.                                                      

  • SX19 trade down through the first support of 919 ½ overnight with the next support @ 909 ½. SF20 finds support @ 9.27 then 9.19 resistance between 9.56-9.59.                                                                                                        

Outlook: Uncertainty over a potential trade war agreement with China and the daily rhetoric that goes along with that is getting old. FND for SX19 is tomorrow which pressures the front end, rains look to show up in a bigger way in Brazil while everyone awaits to see what happens in Argentine after the weekend elections. Harvest will be held up over the next few days due to weather but better weather for harvest looks to be on the horizon. Unfortunately, headlines will rule direction for the time being.                                             

 

 Wheat

  • Egypt’s GASC purchased 235,000 tons of wheat to complete its latest international tender. GASC bot 60,000 tons of French wheat from Glencore @ $235.85/ton c&f, 55,000 tons of Ukrainian wheat @ $234.55/ton c&f, 60,000 tons of Romanian wheat from Cargill @ $235.40/ton c&f, 60,000 tons of Ukrainian wheat from Dreyfus @ $236.16/ton c&f. Prices paid appear to be $3-5 dollars/ton above their last purchase on Oct.16.                      

  • Jordan bought 60,000 tons of optional-origin milling wheat from Ameropa @ $241.00/ton for LH March shipment.                      

  • Ethiopia postponed two upcoming wheat tenders totaling 600,000 tons. A tender for 200,000 tons, slated for tomorrow Oct. 30 was postponed until Nov. 13 while a tender for 400,000 tons was pushed from Nov. 5th until Nov. 14th.

  • The lowest offer to Bangladesh on their 50,000/ton wheat tender was $268.14/ton CIF liner out. Swiss Singapore Overseas submitted the offer which includes shipping, insurance and unloading costs.

  • Overnight, China sold two tranches of wheat from their state-owned reserves. They sold 1,245 tons of 2015 wheat and 76,548 tons of wheat (no year indicated) at the auctions.

  • Deliverable stocks were down 617 thousand bushels in KC (105,986) down 391 thousand bushels in Minneapolis (25,178) and up 396 thousand bushels in Chicago (45,112).     

  • A Bloomberg Survey indicates that U. S. farmers are prepared to plant the fewest of acres of winter wheat varieties in 110 years. The survey says farmers will plant 31.118 million acres of winter wheat varieties compared to 31.159 million acres last year. The estimated planted acres would only exceed the acres planted in 1909 (when record keeping began) of 29.196 million acres.            

                                                                                                                                                                                                                         

Outlook: Same old song and dance for wheat. World prices continue to firm (GASC paid about $5.00/ton above prior purchase), we know about problems in Australia and no other real market moving news seems to be in the offing. Newly seeded wheat is receiving moisture in the HRW belt and should go into dormancy in good shape for the most part. Lower seems to be the path of least resistance.