GOOD MORNING,

It's the start of a new month with new money flows.  The commitment-of-trader's report will be released today due to the holiday.  The funds spent Friday purchasing more grains and selling more beans.  USDA weekly export sales were released on Friday and were good across the board.  China was a buyer of 569 tmt of beans.  Bean sales totaled 1.664 mmt, above the expected, and accumulated exports to date stand at 14.490 mmt vs. 11.734 mmt year ago.  US bean shipments that had been backing up in Chinese ports due to pre-payment of tariffs before they were rebated by the gov. have reportedly been cleared up.  Products continue a consolidation phase at trading range lows, with meal losing to sideways soyoil chart.  Higher palm oil price action continues to support soyoil futures, as the aftermath of African Swine Fever continues to play out.

Corn prices put in a strong showing with fund short-covering on the back of very good sales, which totaled 806,800 mt, up 2% from the prior week and 34% above the prev. 4-week average.  The lack of any deliveries added strength as well.  China's higher corn prices have been noted as well, with senior analysts from other firms stating that prices still remain in an overall downtrend.  Wheat export sales were also strong with sales at 612,700 mt, and the higher trend continued into Friday with a new high this morning.  Russian wheat prices continue to rise as exporter and processor demand draw-down supply.  IKAR noted that Dec Black Sea 12.5% protein was up $0.50 on the week while Russia's SovEcon estimated prices were up $1.00 to $210.50/mt.  Grains appear to start the day on a weaker note led by wheat.  

The trade story of the day as regards the US/China is that an official Chinese newspaper, The Global Times, ran articles that emphasized that there would be no deal without a promise to phase out the tariffs imposed by Washington.  

WEATHER

Major storms throughout the Midwest have disrupted and delayed the remaining harvest.  Drier weather this week will allow for some harvest of corn and beans in the Northern Plains, but the majority of beans have now been lost to winter.  South American weather forecasts show ample moisture for Brazil with Argentina forecasts turning a bit drier.  

ANNOUNCEMENTS

Brazil's Agroconsult estimated Brazil's 2019/20 bean exports to China in a range from 54-59 mmt vs. 60 mmt past season.  The bean production forecast is estimated at 124 mmt vs. 118 mmt a year ago.  

Brazil's Agroconsult estimated 2019/20 corn acres at 18.0 mln hectares, above the 17.5 mln ha estimated by the government and 17.3 mln ha last season.  

Argentina's BA Exchange forecast 2019/20 corn planting at an estimated 45% complete as of Nov 28.  

Capital Economics forecast global bean prices to fall further as Chinese demand weakens due to its much smaller hog herd.  Favorable weather in Brazil and Argentina boosted optimism over supplies.

Australia's ABARE lowered its 2019/20 wheat production forecast to 15.85 mmt, down 18% from their 19.2 mmt estimate in Sep.  The latest forecast is about 35% below the 10-year average production.  

DELIVERIES

Meal:  260

Soyoil:  1270

KC wheat:  11

CALLS

Calls are mixed as the lack of deliveries for corn and wheat continue to be supportive, while shorts cover in beans against market lows:

beans:  3-5 higher

meal:    80-1.00 higher

soyoil:  5-8 higher

corn:     steady

wheat:  1/2 -1 lower

OUTSIDE MARKETS

Outside markets feature a firm crude oil market which trades up to $56.67/barrel, with a firmer US dollar at 98.37.  Stocks are slightly higher, up 22 pts.  

TECH TALK

• Jan beans finally hit a target low of $8.77 ½, which may hold as it represents a match with an old low from last Sep.  The chart remains oversold at 24%, and percentages that get close to 20% oversold typically find housecleaning in not too distant a time.  
• Major trend for Jan meal is lower, with the break of $300.00 having little back support to cushion a fall to new contract lows at $292.80, so this chart will have to throw off a good signal to indicate that the downside is complete.  
• Jan soyoil congests from 3025c to 3070c, with prices congesting around the neckline of a possible head and shoulders top which has so far yet to play out. However, the presence of a topping formation was enough to create a break towards the major benchmark level of 30c.  
• March corn reverses out of its lows of $3.73-$3.75, which lends more support to a sideways trade.  The trade back over $3.80 brings more support to lower levels, and in doing so could find more shorts opting out of positions.  
• March wheat continues its uptrend with a high trade of $5.46 placed Friday, and not much back resistance to stop an advance to the peak high of last July at $5.54 if prices hit new highs.  In many ways the soyoil and wheat charts are beginning to look similar with values from Sep. to now placing new monthly highs.  

MARCH CORN

Sporting a less depressed look having traded down to $3.73 but not staying there for long.  Additionally, the chart cleared recent tops at $3.82 1/2 which now sets the table for further short-covering towards the $3.87/$3.88 level.  As noted last week, prices had started to move sideways from lower, which interrupted the downtrend.  The activity from last Friday started the day lower but with a solid close higher, which stabilizes the chart enough to probably clear the way for pullbacks to find new buying interest.  The chart is now continuing a theme of sideways trade from $3.73-$3.83, which may continue as a slightly new and stable trend for the month of December. 

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America