Morning Highlights


Highlights

  • First trading day of December brings varying trade war news.
  • China’s manufacturing activity expanded more than expected in November.
  • China bans US military visits to Hong Kong in response to the US support for Hong Kong’s protestors.
  • President Trump reimposes tariffs on steel and aluminum imports from Argentina and Brazil, announced via early morning tweet.
  • Outside markets as of 7:00 AM Central: January crude is $1.40 higher; gold is down $8.90, DOW futures are 47 points higher and S&P futures are up 4.50 points. The US Dollar index at 98.361 up 0.088. 

Corn

  • Corn has traded nominally mixed overnight as large spec funds remain net short an estimated 150k. Friday’s COT was delayed until this afternoon.
  • A winter storm over the weekend continues to disrupt what remains of harvest, causing some fields to likely remain until spring.
  • The BA Grain Exchange reported Argentina corn planting at 46.2% complete. Brazil sees mostly favorable weather for its main corn crop.
  • FOB US export offers remain well above Russia and Argentina offers. Brazil offers reflect their supply tightness ahead of their next harvest.
  • There were no corn deliveries: Spreads: H/K 4 ½ cent carry; K/N 4 ¼ cent carry; N/Z is ½ cent carry. 

Outlook:  fractionally mixed 

Oilseeds

  • Soybeans are trading slightly higher despite seemingly little to now progress in the trade war with China. Weekend stories state that China wants a removal of tariffs for a successful Phase One deal, not just the removal of planned tariffs. The US is ready to impose an additional 15% tariff on $156B of Chinese goods on December 15th.
  • FOB US export offers remain competitive to Argentina offers and a discount to Brazil offers in the Dec/Jan timeslots. Brazil becomes competitive for their harvest forward timeframe.
  • Brazil weather has generally been favorable with rains and forecast rains over the next 10 days.
  • Deliveries: 260 soymeal contracts, 1270 contracts soyoil.
  • Malaysian palm oil begins the week losing 13 ringgit.
  • Spreads: F/H 14 ½ cent carry; H/K 14 ¾ cent carry; F/N 42 cent carry. 

Outlook: 2-4 cents higher 

Wheat

  • The wheat markets are weaker overnight, as Chicago HRW and SRW contracts consolidate at the top end of their higher trending trading ranges while MGEx hovers 10-15 cents above its contract lows.
  • Deliveries: 343 contracts MGEx, 11 contracts KC HRW. The WZ premium over WH grows to a 7 cent inverse.
  • Russia’s AgMin cuts their wheat production estimate though winter crops are reported in as good/better condition than a year ago. France continues to battle wet conditions with seeding reported at 80% complete vs 99% last year.
  • Stats Canada’s next production report is scheduled for Friday Dec 6.
  • Spreads: Chicago H/K 3 cent carry; Kansas City H/K 8 cent carry; Minneapolis H/K 8 ¾ cent carry. 

Outlook: easier across all three markets