Morning Highlights


Highlights

  • Grain markets were higher overnight. The US$ is stronger while the CD$ and gold are weaker.
  • Energy markets are stronger with the nearby crude oil almost a buck higher.
  • Average trade estimates for weekly export sales; corn 800 tmt-1.1 mmt, beans 900 tmt-1.2 mmt, meal (100) tmt-300 tmt, oil (25) tmt – 22 tmt and wheat at 300 tmt-500 tmt.

Corn

  • Corn was slightly lower, trading a 1-2 cent range overnight. Support in the Dec is seen near $3.40 with resistance up around 3.60. 
  • Corn should trend lower with a carryout over 2.0 billion bushels and a yield only 2.8 b/a below last year.  
  • The corn market failed to follow the bean market high as the USDA report data was negative for corn.
  • Improving harvest weather for next week and continued decent yield reports should keep the corn market on the defensive.
  • Harvest progress was at 22% last week.  Progress come Monday should be near 30-40% complete.
  • Spreads; Z/H 13 ½-13 ¾ carry, Z/K 22 ½ carry, Z/N 29 ¾ carry.

Outlook: lower trade on big crop ideas and increasing harvest activity

Soybeans

  • The soybean market traded higher overnight on follow through from yesterday. Support in the November is near its 200-Day Ma of $9.75 ½ with resistance at $10.00.
  • December palm oil closed 38 higher at 2,749 ringgits. China’s bean market was quiet.
  • Soybean harvest has been decent this week, although we could see delays from expected rains over the weekend.  Next week is expected to be a decent harvest week.
  • Harvest progress was last at 36% and should be near 50-60% complete by next Monday.
  • Brazil remains dry, planting progress is slow.  Argentina is expected to see dry weather conditions also.
  • Spreads; X/F 10 carry, X/N 36 ¾ carry.

Outlook: choppy trade ahead of the weekend

Wheat

  • The wheat bounced higher overnight with the MWZ 2 ¾ cents under its 200-Day MA of $6.17 ½. KC & Chicago Dec traded in 2-cent range overnight, holding 7-8 cents above their contract lows.
  • Winter wheat plantings were reported at 48% complete through last Sunday.  Planting progress is expected to be 50-60% complete by Monday.  Next week should better for harvest and planting activity.
  • Spreads; Mpls Z/H 13 ½-13 ¾ carry, Kansas City Z/H 18-18 ¼ carry, WZ/WH 18 ¾-19 carry (52% of full carry). Mpls gained on KC and Chicago, holding a risk premium over the other markets from a protein standpoint.
  • Th fund short position in Chicago was last reported near 105k contracts.

Outlook:  Choppy trade ahead of the weekend......wheat should feel the pressure of plentiful world stocks