CBOT Weaker in Overnight Trade Awaiting Political Developments; Seasonal Price Trends Support
** 6:30 AM CDT CBOT Prices: Jan beans are down 5.0 cents at $8.8725, Dec corn is unchanged at $3.6475 while Dec Chi wheat is down 3.50 cents at $5.0325.
** AgResource AM Grain & Oilseed Comment: Good Morning! Opening week trade started mixed and turned lower overnight in extremely light volume. It’s a US holiday shortened week of trade and few traders want to bet on the political outcome of US/Chinese trade talks later next week. Look for limited volume to be a feature of the week, but it’s worth noting that funds were short 55,000 contracts of soybeans thru Tuesday, which was up 10,000 from the prior week. The fund short is likely to underpin the soybean market this week.
US President Trump offered hope to US farmers late Friday that the US/China trade spat might be on hold. Trump stated that the long list of China trade offers went some ways to meeting US demands, which might forestall additional US tariffs and facilitate future US/China talks.
However, VP Pence talked tough on China in weekend APEC meetings as the Administration embarked on a good/bad cop negotiation strategy. It’s not surprising that Pence or others will continue to bash China ahead of G20.
82% of the French winter wheat crop was rated GD/EX, the worst ratings in 6 years with 97% of the crop rated GD/EX last year. EU traders tell ARC that German, Poland and Romanian wheat conditions are even lower amid the worst drought to strike the EU in decades. It raises 2019 wheat winterkill concern.
Saudi Arabia’s SAGO purchased 495,000 MTs of Jan-March EU/Aussie, Argentine or US wheat at the seller’s option. This price is down $2.30/MT from their last tender for November/December. EU exporters argue that a few cargos may be German wheat, but much of the demand will be filled by the US or Argentina. Yet, it’s uncertain if Argentine wheat can meet their strict 12.5% pro specs?
Turkey’s TMO has launched a tender for 240,000 MTs of Dec-January red wheat which will likely be sourced from Russia. Traders note that Nov 1st Russian wheat stocks are well down on last year in the key export areas of SE Russia.
Malaysian palmoil futures rallied on oversold conditions and the ongoing development of El Nino. The December contract settled 25 ringgits higher.
Dry weather will persist across much of the EU/W Russia, while near to above normal rain benefits Brazilian soybeans. And a near to below normal rainfall trend helps Argentine spring soybean planting resume.
It’s another directionless day with the CBOT awaiting US/China trade talks. Don’t sell breaks and don’t chase rallies.
** Any US Precip will be focused on the Eastern 1/3 of the US:
** Drought to Worsen Across EU and W Russia:
** US Split on Temps; Colder than Normal Across Central and East: