Morning Highlights


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 http://chshedging.com and click on the appropriate link to the class or classes you may be interested in attending.   
  • The November WASDE report will be released this Friday, November 8th, at 11 AM CT.
  • According to the United Nations food agency, China’s pork output is expected to fall by at least 20% in 2019, due to the ASF breakout.
  • The Chinese commerce ministry stated that for a trade deal to be agreed on, both sides must simultaneously cancel some of their tariffs.
  • The United Nations reported the world food prices increased in October for the first time in five months.
  • As of 7:00 AM: Crude oil up 0.76 at 57.13, Dow futures up 136 points at 27,567, and the U.S$ index down 19 ticks at 97.993.                          

 Corn

  • The corn market is trading a fraction higher overnight as traders position themselves in front of the WASDE report out tomorrow.
  • Export sales are estimated at 300,000-650,000 MT.
  • Ethanol production increased again this week, the 6th consecutive week of increased production numbers. Production in the week ending November 1st came in at 1014 kbd, compared to 1004 kbd the week prior.
  • South Korea’s FLC purchased an unknown amount of corn in a tender for up to 69,000 tonnes. The price is believed to be $205.63 a tonne c&f.
  • Spreads: Z/H 9 cent carry; H/K 6 ¾ cent carry; K/N 6 ¼ cent carry; Z/N 22 cent carry.

Outlook: Trade will remain quiet and range bound today as the market awaits any changes on the USDA report tomorrow morning.

 Oilseeds

  • The soybean market is trading a few cents higher overnight due to renewed optimism surrounding the trade war.
  • The Chinese commerce ministry stated that the U.S and China have remained in close communication and hopes both sides will address each other’s concerns in order to agree of “phase one” of the deal.
  • The estimates for soybean exports are seen at 600,000-1,200,000 MT. Soymeal export estimates are set at 150,000-300,000 MT and oil exports estimates are at 5,000-25,000 MT.
  • Indonesia and Malaysia total palm oil production is expected to stay unchanged in 2020 compared to this year due to dry weather. Indonesia is forecasted to produce 1 million more tonnes, and Malaysia is forecasted to produce 1 million less tonnes, offsetting each other.
  • Spreads: F/H 12 ¾ carry, F/N 34 ¾ carry, H/K 11 ¾ carry.

Outlook: Trade war optimism will provide some direction for the market today, but markets will likely remain quiet as traders expect to see a friendly report tomorrow.

 Wheat

  • Wheat markets are mixed overnight with Chicago and Minneapolis finding some strength and trading a couple cents higher, and KC trading slightly lower.
  • Exports for wheat are estimated to come in at 350,000-600,000 tonnes.
  • Japan purchased 123,928 tonnes of food wheat in a tender that closed Thursday. The purchases included 9,455 tonnes of U.S Western White, 14,940 of U.S Hard Red Winter, and 32,715 tonnes of U.S Dark Northern Spring.
  • Syria made no purchase in their tender for 150,000 tonnes of Russian milling wheat.
  • Ukraine’s Agriculture Ministry lowered its grain harvest forecast for 2019 from 71.8 million tonnes to 71.0 million.
  • Spreads: Chicago Z/H 4 ¾ cent carry; Kansas City Z/H 9 ½ cent carry; Minneapolis Z/H 15 ½ cent carry.

Outlook:  Markets will continue sideways to choppy trade as there is no fresh news to give them any direction and traders continue to wait for the USDA report out tomorrow.