Morning Highlights


Highlights

  • The USDA’s monthly WASDE report will be released at 11:00 AM CDT today.
  • The U.S. dollar is trading 0.078 points higher at 93.093.
  • Crude oil is trading lower by 72 cents in the November futures month at $50.58.
  • The DJIA is trading up 42.21 points at 22,872.89.
  • Gold is $8.60 higher at $1294.4/100oz.

Corn

  • Overnight corn was slightly firmer, coming off of one month lows with a narrow trade range as traders wait for the supply and demand report this morning.
  • Meteorologists show no indication of drought relief in northern and central Brazil as weekend rains will primarily fall over southern Brazil. This raises concerns for corn and bean planting.
  • China’s Ministry of Agriculture lowered its corn production forecast to 210 million metric tons for the 2017/18 crop year, a reduction of 2.37 million metric tons. The ministry also raised its forecast for industrial consumption by 1.05 million metric tons to 61.3 million metric tons due to the recent government plan to encourage the use of ethanol in gasoline.
  • To recap before the report: the average estimate for corn yield in today’s report is estimated at 170.1 bushels per acre, which would be a 0.2 bpa increase over the September WASDE report.
  • Spreads: Z/H 13 ½ carry, Z/K 22 ¼ carry, Z/N 29 ¾ carry.

Outlook: Choppy with a narrow range ahead of today’s report.

Soybeans

  • The soybean market bounced slightly higher overnight, finding strength from dry areas in Brazil north and central states and from a long term dry outlook for Argentina due to La Nina.
  • Soybean oil and meal were higher overnight, finding spillover strength from soybeans. Soy oil also finds support from a higher palm oil market.  
  • Malaysian palm oil futures were higher by 15 ringgits overnight, but remain down 19 ringgits from last Friday after sizeable losses on Tuesday.
  • Malaysia raised its export tax on palm oil for the month of November by 0.5% to 6.5%.
  • WASDE recap: Average estimates come in at 50.0 bpa compared to the September report’s 49.9 bpa.
  • Spreads: X/F 10 ¾ carry, X/N 38 ¼ carry.

Outlook: Choppy but quiet ahead of the report.

Wheat

  • The Chicago and Kansas City wheat markets managed to find some strength overnight, coming off of near one-month lows from yesterday. Minneapolis wheat was unchanged to slightly lower in very light volume.   
  • A French grain consultancy raised its all-EU 2017/18 soft wheat production estimate to 142.8 million metric tons from 142.5 million metric tons.
  • Wheat prices continue to struggle due to a large global supply. Russia’s crop has been estimated at 81 million metric tons and the USDA has increased its production estimate for Russia in every month since May when the original estimate was 67 million metric tons. It will be interesting to see if 81 million metric tons will hold in today’s report.
  • Spreads: Mpls Z/H 13 ¼ carry, Kansas City Z/H 18 ¼ carry, Chicago Z/H 19 carry.

Outlook:  Choppy ahead of the report as traders engage in positioning.