Morning Highlights


Highlights

  • Temperatures across the central US are very cold for this point in the season.Single digit temps were recorded as far south as Amarillo, TX, while International Falls, MN reported a morning low of -9 degrees.
  • As of 6:15 am central time, Dow futures are up 20 points.The US dollar index is up 171 points and WTI crude oil future are up 21 cents a barrel trading at $57.07 a barrel.
  • President Trump is expected to give a speech at the Economic Club of New York today where he is expected to make comments on trade and an update on where things sit with China.
  • Dean foods, America’s largest milk producer, has filed for Chapter 11 bankruptcy this morning. Dean foods say it has engaged in advanced discussions with Dairy Farmers of America about selling substantially all its assets but is subject to potentially higher offers that could come.
  • Crop progress is out this afternoon and export inspections this morning as the government was closed in observance of Veteran’s Day yesterday. Export sales are to be released on Friday instead of Thursday.

 Corn

  • Corn is mixed this morning on a quiet overnight market. The December contract has failed to break through $3.725 over the previous two trading sessions.
  • Crop progress report this afternoon is expected to show harvest around 65-68% complete vs. the 5-year average of 85%. Harvest has been a slow grind with cold, wet, snowy conditions making meaningful progress hard to come by.
  • Farmers haven’t been selling much of their corn as prices aren’t high enough and the high moisture content is enticing folks to dry down their own corn. However, propane availability has become an issue in some areas and has slowed progress even more.
  • Spreads are tighter this morning: Z/H 8 ½ cent carry; Z/K 15 ¼ cent carry; Z/N 21 ½ cent carry.

 Outlook: Mixed market, struggling to find a reason for buyers to push it higher.

 Oilseeds

  • Soybeans are mixed this morning, struggling to gain much traction higher. Crop progress is expected to show harvest around 86-89% complete vs. 75% last week.
  • Palm oil futures pulled back from the new two year high they set yesterday and were down 25, settling at 2,602 ringgits per ton overnight. Soybean oil futures are down this morning in response.
  • 233 contracts of soybeans were delivered against November futures.Open interest, as of yesterday’s close, in November futures is now under 400 contracts.
  • South America weather conditions look favorable as rains have fallen over a large portion of Brazil and forecasts show widespread rains expected for Brazil and Argentina. However, the east central portion of Brazil is dry and looks to remain dry in the extended forecasts.
  • Brazil Real weakened to 4.20 Real to one US dollar yesterday, which is getting close to the weakest level it has been.
  • Spreads tighter this morning: F/H 13 ¼ cent carry; F/N 36 ¼ cent carry; N/X 3 ¾ cents carry.

 Outlook: Mixed market, seemingly waiting for President Trump’s comment on trade around lunchtime.

 Wheat

  • Wheat is higher across the board with KC wheat leading the way, up a couple cents. Markets are bouncing back this morning after having traded lower in the previous four trading sessions.
  • Argentina is expected to remain dry for the next 5 days, but both the GFS and Euro weather models have turned wetter in the 6-10 day outlooks.
  • France’s farm ministry lowered its estimate for their 2019 soft wheat production by 200,000 tonnes to 39.5 million tonnes. A reduction in acres is the reason for the drop.
  • Ethiopia tendered for 80,000 MT of milling wheat. Japan is looking for 117,761 MT of food wheat from US, Canada or Australia.
  • Spreads are tighter this morning: Chicago Z/H 4 ¼ cent carry; Kansas City Z/H 7 ¼ cent carry; Minneapolis Z/H 15 ½ cent carry.

 Outlook: Higher but struggling to find much upside as corn stays weak.