Morning Highlights


Highlights

  • POTUS attends NATO summit in London.
  • POTUS says a trade deal with China may have to wait until after the 2020 election.
  • France and the US both threaten tariffs.
  • Outside markets as of 7:00 AM Central: January crude is $0.02 lower; gold is up $5.50, DOW futures are 105 points lower and S&P futures are down 8.75 points. The US Dollar index at 97.790 is down .066. 

Corn

  • Corn has traded modestly higher as the USDA reports US corn harvest at 89% complete, up from 84% last week and 98% average. North Dakota remains the furthest behind at only 36% harvested, followed by Wisconsin and MI at only 66% complete. Yet to be harvested is over 4 million acres and nearly 650 million bushels.
  • Yesterday’s Commitment of Traders put large spec and managed money funds at net short 137.9k and 116k respectively, as of 11/26/19.
  • US cash markets remain driven by the domestic end user as US exports continue to be quite poor. Optimism does exist as Brazil stocks become tighter and harvest is still ahead, as some traders feel the US may be able to garner additional export demand.
  • A winter storm over the weekend continues to disrupt what remains of harvest as some fields have snow and ice on the stalks. Some fields will likely remain unharvested until spring.
  • There were no corn deliveries: Spreads: H/K 4 ¾ cent carry; K/N 3 ¾ cent carry and N/Z is ¼ cent carry. 

Outlook:  Trading 1 to 2 better 

Oilseeds

  • Soybeans are trading higher again despite little to no progress in the trade war with China.
  • Technically, SF has the September low of $8.65 as potential support.
  • The USDA estimates US soybean harvest at 96% complete, up 2% from last week. MI has 15% remaining, WI 14% and North Carolina has 25% unharvested.
  • Overall, US shipments to China have been strong without a signed trade deal and US soybeans remain competitively priced.
  • NASS reports the October crush for Fats and Oil was a new record high at 187.2mb. NOPA reported at 175.4mb.
  • Brazil weather is generally favorable with rain and additional rain forecast over the next 10 days. Crop Consultant Dr Cordonnier left his Brazil production estimate unchanged at 123mmt and has a neutral bias. He also kept steady on his Argentina estimate of 54mmt.
  • Deliveries: 319 soymeal contracts, 878 contracts soyoil.
  • Malaysian palm oil began the week down 13 ringgit but rebounded 16 ringgit overnight.
  • Spreads: F/H 14 ½ cent carry; H/K 15 ¼ cent carry; F/N 43 ¾ cent carry. 

Outlook: Trading 2 cents higher 

Wheat

  • The wheat markets are higher overnight but remain choppy day to day.
  • Yesterday afternoon, Algeria and Egypt’s GASC issued tenders for Jan and Feb shipment.
  • ABARES reduction to their Australian production estimate is now old news. The weather remains hot and dry and there may be further revisions coming.
  • The Commitment of Traders shows managed money holds a net long position in Chicago of 10k but large spec funds are net short 13k. In Kansas City both categories are net short and managed money is net short MGEx.
  • Stats Canada’s next production report is scheduled for Friday Dec 6.
  • Spreads: Chicago H/K 3 ¼ cent carry; Kansas City H/K 8 cent carry; Minneapolis H/K 8 ½ cent carry. Both Chicago and KC Z/H are inverted.
  • Deliveries: 11 contracts KC, 0 Chi, 17 MGEx. 

Outlook: Trading better across all three markets