Morning Wire


Highlights

  • Chinese authorities have lifted a 4-year old ban on poultry imports from the US effective immediately.The ban was put in place following the outbreak of avian flu in the US in 2015. China continues to struggle with protein shortages due to African Swine Flu hitting their hog herd.
  • The Chinese economy grew at a slower pace than expected in October.Economists had been expecting China’s industrial output to be up 5.2%, however the actual data only showed a 4.7% increase.
  • Dow Jones Index futures are down 31.The US dollar index is up 82 points this morning.WTI crude oil is up 51 cents per barrel.
  • The export sales report is delayed until tomorrow due to Monday’s observance of Veterans Day.
  • December grain options expire next Friday, Nov 22nd.

 

Corn

  • The central US is expected to be mostly dry over the next 5 days.Some light rains are expected in the upper Midwest over the weekend, but precipitation totals should be less than ½ inch in most areas.
  • Spreads this morning: Z/H 8 ¾ cent carry; Z/K 14 ½ cent carry; Z/N 20 ½ cent carry.

 

Outlook: 1 to 2 higher.  Feed and residual accounts for 38% of the total demand for the corn produced in the US.  The potential for China to import US poultry is a good sign for feed demand.   

 

Oilseeds

  • Bloomberg news is reporting that “people familiar to the matter” say that the CME Group, in conjunction with Brazil’s B3 futures exchange, plans to launch a Brazilian soybean futures contract.The contract is to be for soybeans loaded at the port of Santos and would be cash-settled on assessments by a price-reporting agency.Both the B3 exchange and CME Group declined to comment.
  • Brazil’s central and northern states are still expecting to receive 1-2 inches of rain over the next 5 days, while the southern states are only expecting limited moisture.The 6-10 day forecast for Brazil shows continued dryness in the southern states with near normal temps expected over the region.
  • Argentina’s weather forecast looks mostly dry for the next 5 days, but the 6-10 day outlook is predicting another round of moisture across most of the growing regions.
  • There were 214 contracts of soybeans delivered overnight.Open interest in the Nov at the close yesterday was down to 241 contracts.November soybean futures go off the board today at noon.
  • Palm oil futures were up 20 ringgits overnight, closing at 2,606 ringgits per tonne.
  • Spreads this morning: F/H 13 ¼ cent carry; F/N 36 ½ cent carry; N/X 3 ¾ cent carry.

 

Outlook: Flat to 3 lower based on continued good South American growing conditions.  However, the news about China allowing imports of US poultry is supportive to demand for soybean meal.  Crush demand is expected to be 52.5% of the total demand for US soybeans this marketing year. 

 

Wheat

  • Egypt has an open tender to purchase wheat.We are expecting those results yet this morning.
  • Spreads this morning: Chicago Z/H 4 ½ cent carry; Kansas City Z/H 8 ½ cent carry; Minneapolis Z/H 15 cent carry.

 

Outlook: mixed to start. This market continues to be choppy while traders are patiently waiting for new news to trade on.