11/8/18

Morning Commentary - 11/08/2018

CBOT Firm Overnight Awaiting USDA November Crop Report Data

** 6:30 AM CDT CBOT Prices: Jan beans are up 2.0 cents at $8.815, Dec corn is up 1.75 cents at $3.74 while Dec Chi wheat is up 1.0 cent at $5.1125.

 ** AgResource AM Grain & Oilseed Comment: Good Morning and welcome to another USDA crop report day. This is the final NASS crop estimate of 2018 with final revisions due in January. The bulls argue that this is there day with downward revisions pending in corn/soybeans due to the extremely wet and often windy October. The wet/windy weather caused crop lodging and ear/pod droppage.

  The average trade estimate is for NASS to trim the US corn yield by .7 BPA to 180.0 BPA and the soybean yield by .3 BPA to 52.8. The yield cuts are modest, but most traders fear that harvest losses could be larger.

  Following today’s USDA Crop report the ag market’s full attention will be focused on the late November dinner between Trump and Chinese President Xi and whether further US/China trade negotiations will evolve? Trump maintained his optimism for some sort of deal in an hour-long press briefing on Wednesday.

  October Trade Data showed Chinese trade resilience. Total Chinese October exports rose 15.6% with imports up 21.4% from last year. China’s soybean imports reached 6.92 MMTs, up 18% with edible oil imports steady at 471,000 MTs. Crude oil imports were up a whopping 31% at 40.80 MMTs. There is no evidence that US trade tariffs are having an impact on supplies/exports in the Chinese economy. So far, China has been able to source its needs elsewhere.  

  The head of the French Oilseed growers group – FOP – indicated that 2019 rapeseed plantings would be down 30-35% on drought. This would reduce rape planted area to 1-1.1 Mil HA. The sharp fall in winter oilseed crops has many traders wondering if winter cereal plantings could be sharply lower?

  The EU/Black Sea weather forecast maintains an arid flow. Temperatures will be seasonally cooling with arctic air noted across C & S Russia. There is no evidence of precip that will help restore soil moisture heading into winter.

  China’s ag ministry did not help sinking confidence levels on corn statistics. The ministry forecast a larger 18/19 Chinese corn deficit of 29.3 MMTs vs the 22.3 MMTs projected last month as farmers use more corn for feed. The ministry’s corn production forecast is sharply lower than the State Stats Bureau which only added to the new statistical confusion. 

 Good luck with today’s November USDA Crop Report. Our market lean is to buy moderate declines in wheat, while selling corn/soybeans on rallies. It’s the Trump/Xi dinner meeting late month that holds long term CBOT ramifications.

** Wet Weather for Argentina and S Brazil Starting this Weekend: 

** No end to the Drought Across the EU and Black Sea: 

 

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