CORN

Corn futures consolidated overnight within yesterday’s higher trading ranges.  Dec is at 4.10 and above it’s 10 and 20-day moving averages that are converging at 4.05.  New lows for the move in the dollar overnight is helping prop-up the grain complex, though crude is reversing lower this morning.  Managed Money were net buyers of 7,000 corn yesterday and are estimated net long 238,000 corn contracts supported by signs that over the next 2 weeks, rainfall in Russia, South Brazil and Argentina will be less than normal.  U.S. corn harvest, meanwhile is estimated near 92% versus 79% average.  Looking ahead to next Tuesday’s Nov USDA report, the average guess for the U.S. 2020 corn crop is 14.569 bil bu versus USDA last estimate of 14.722. The U.S. 2020/21 corn carryout is estimated near 2.033 bil versus 2.167.

SOYBEANS

Soybean futures were firm overnight after reaching new highs on Thursday.  Jan beans are up 3 to 11.06-3/4, 6 cents below the new high. This is the first time since 2016 that the Jan contract has been above $11/bu and could suggest a test of 12.00 should the World soybean stocks-to-use ratio stay near a 23 year low.  National Weather Service said this year’s South America dry weather pattern is the 2nd driest since they started keeping records in 2002.  Big U.S. export sales news this week was India buying U.S. soyoil with U.S. export prices viewed by many as the lowest vegoil price in the World.  There appears to be sunoil available from the Black Sea and World palmoil production is declining.  Managed funds were net buyers of 12,000 soybeans, 4,000 soyoil and 6,000 soymeal on in Thursday’s rally, and are estimated net long 240,000 soybeans, 92,000 soymeal and 97, 000 soyoil.

Wire story reports U.S. soy sales to China this month have cooled from their previously hot pace, raising the question of whether China is simply taking a breather from the U.S. market, or if most of the intended volume has already been purchased and buyers are awaiting Brazil’s new supply; China’s appetite for U.S. soybeans has surged in recent months, helping overall U.S. farm trade to the Asian country set new records for the time of year; it has also moved Beijing closer to fulfilling the heavy purchase targets outlined in the Phase 1 trade deal.

WHEAT

Wheat futures were up 2 to 4 cents overnight, regaining some of the yesterday’s close off of session highs.  A weaker dollar is supportive and wheat is taking cues from movement in row crops.  Russia export prices continue to trend higher but are still below U.S., and China has recently announced they will not buy wheat from Australia. Tender Activity showed that Egypt bought 300,000 tons of Russian wheat; Pakistan bought 320,000t of optional-origin wheat. By class, HRW wheat sales are up 12%, shipments 3% ahead with the USDA forecasting a 9% increase;  SRW sales are 26% behind, shipments 25% behind with a 13% decline seen, and; HRS sales are 15% ahead, shipments up 8%  with a 1% increase seen.

USDA estimates World wheat end stocks at 321.4 mmt versus 299.4 last year. The trade now looks for stocks to be near 319.7 when USDA updates their numbers on Nov 10 with a range of 318-323.

CATTLE

Cattle futures calls are steady to higher as the market grinds higher for the week.  Cash trade is shaping up around $107/cwt , up $1.00/cwt from last week with more trade likely to develop as the week closes out.  Feedlots appear to holding out for higher levels.  Choice Carcasses stayed firm into the close on Thursday, up 2.36 to 212.22 and it’s been encouraging to see the mid-day levels rally into the close.  Export demand stayed supportive at new sales of 20,700 MT, and Shipments at a marketing year high of 21,400.  The grain market rally keeps feeders mixed with the cash feeder market improving at 137.91. 

HOGS

Lean hog calls are mixed to higher following a nice rebound over the past two days.  Export sales rebounded at 42,200 MT after 2 disappointing weeks; China was a buyer of 10,300 MT.  Dec has pushed higher out of consolidation on strong retail movement.  Retail values lost some value off mid-day, but still closed higher up 3.97 to 86.39, but the CME Pork carcass cutout index (IJ.X) fell 3.22 to 843.99, reflective of the weak retail market over the past 5 days.  The CME Lean Hog Index trends lower, losing another .83 to 72.05.

Author

Matthew Strelow