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

  • Today is FND for November grain futures, end of the month and Halloween. Here’s hoping you have a Spooktacular Day!

  • Daylight Savings Time ends this Sunday 11-3-19 @ 2:00 A. M. Fall back one hour on your clocks before your head hits the pillow Saturday 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 go from 65 cents to 60 cents, to be the only real change most folks will take notice of. 

  • On Wednesday, Chile canceled the APEC meeting scheduled for Nov 16-17 due to political unrest in that country. The U. S. and China were to sign the Phase 1 trade war agreement at that time. The White House still says they want to sign the agreement in November but an alternative meeting sight or date for the signing is still unknown.        

  • The Federal reserve cut interest rates on Wednesday afternoon by 25 basis points to a range of 1.50-1.75 %. The vote in favor of the rate cut was 8-2. New language in its policy signaled a possible easing in further rate cuts.

  • Chin’s PMI (purchasing manager’s index) fell for the sixth consecutive month to 49.3 in October, down from 49.8 in September. A number under 50.0 shows contraction in the economy.

  • Overnight, North Korea fired two missiles toward its eastern sea as they apparently resumed weapons tests aimed at pressuring the U. S. to get back to the negotiating table to get a deal done on nuclear weapons and to ease sanctions on that country.                                                                                                                                       

  • A/0 7:50 A. M. Crude Oil down .74 @ 54.33, Dow Futures down 50 @ 27,081 , U. S. Dollar Index down .1890 @ 97.261  .   

            

Corn                                                

  • Corn sales totaled 549,100 MT for the 19-20 marketing year vs trade estimates of 300-800 MT. Sorghum sales for 19-20 totaled 56,000 MT.

  • Additional corn delivery certificate cancelations overnight of 373 contracts.      

  • South Korea’s Major Feedmill Group purchased 69,000 tons of optional-origin corn on their tender issued on Wednesday to buy up to 140,000 tons.

  • Wednesday’s report showed net ethanol margins were up 4 cents and stand at 16 cents positive.                                                     

  • Zimbabwe says they will need to import about 850,000 tons of corn after a drought left half of that country’s population in need of food aid.                                               

Outlook: Export sales offered nothing to get excited about. Overnight trade sees prices move 2 ½-2 ¾ lower. Choppy trade should continue as we move towards next USDA report on Nov.8. Harvest weather looks better after the next couple of days. Just remember, EOM activity could influence price direction today.                                            

 

Oilseeds                      

  • Soybean export sales came in @ 943,600 MT for the 19-20 marketing year. Trade estimates ranged from 500-1.1 MT. Soymeal sales for 19-20 totaled 179,100 MT vs trade estimates of 100-250 MT. Meal sales for 20-21 were 400 MT.  Oil sales for 19-20 were 29,900 MT vs trade estimates of 0-24 MT. Oil sales for 20-21 were 200 MT.     

  • Soybean deliveries against the SX19 contract totaled 1,659 contracts. The next oldest date is 10/29/19. Wells Fargo putout 1,175 contracts with J.P. Morgan stopping 115 contracts.                                                       

  • USDA September crush is estimated @ 161.8 million bushels with the range of estimates between 161.3-162.5 million bushels. The USDA reported 177.5 million bushels were crushed in August while 169.6 million bushels were crushed in September 2018. Soybean oil stocks are estimated @ 1.792 billion pounds vs 1.806 billion pounds in August.

  • Wire stories this morning imply that China could remove the extra tariffs on U. S. farm products to help Chinese importers buy up to $50 billion dollars of U. S. Farm goods. If the tariffs were removed it would allow Chinese importers to buy based on market conditions instead of just buying because they been told to do so-a supposed sticking point in completing a Phase 1 agreement.                                                                                                            

Outlook: Uncertainty over trade war agreement continues to hang over the bean market, deliveries were sizeable, weather gets better for remainder of harvest into next week but for now delays remain. Overnight trade very choppy, harvest delays could leave a bid under the market, rumors persist of possible Chinese demand for U. S. soybeans but direction could be influenced today by end-of month activity.                                                 

 

 Wheat

  • Wheat export sales for 19-20 came in @ 493,800 MT vs trade estimates of 200-500 MT.                     

  • Egypt’s Supply Minister Ali Moselhy says that country has enough strategic wheat reserves for 4.8 months.                       

  • Recent rains in Argentina have come too late to help wheat fields recover from a prolonged dry spell in some of the key growing areas in that country. Wheat yields that had been expected to be 3.2 tons per hectare have been lowered to an estimated 2.8 tons per hectare according to Argentine consultancy Agritrend. Overall the wheat crop is now estimated at 19-19.5 million tons, down from earlier estimates of 21 million tons.    

  • Despite the afore mentioned paragraph, Argentina sources say they could export up to 2 million tons of wheat to Vietnam to help replace shipments from Russia that were under scrutiny due to the presence of thistle. Argentina currently exports about 800,000 tons of wheat per year.

  • Overnight, China sold 1,679 tons of imported 2013 wheat from their state reserves. The sale represented just over 3.3 % of the total offer at the auction.                

                                                                                                                                                                                                                         

Outlook: Oh boy, another night session with lower prices. No news is bad news so choppy-sideways to lower trade is expected.