THE OPEN
Nov beans: steady
Dec soyoil: 13 higher
Dec meal: .60 lower
Dec corn: 4 lower
Dec wheat: 1 lower
Prices started the day as called with wheat once again placing new highs for the move up. Wheat prices found a bid with prices jumping to new highs, providing spillover support for corn. The soy complex traded higher as funds bought beans/sold corn.
SOY
- The soy complex remained well bid after the open led by beans/meal.
- Oilshare corrected down to 33.0% with crush firming to 79c/bu.
- Nov beans found buying interest out of the gate as Dec meal bounced off lower support at $306.00. Export sales gave beans a boost as they were at the highest end of trade expectations. Major destinations were for China (851 tmt including 63 tmt switched from unknown), as well as for Mexico and Thailand.
- Spreads were slightly firmer with Nov/Jan beans narrowing into 13 3/4c from 14c, and Jan/March beans into 11 1/4c from 12 1/4c. Meal spreads were wider with Dec/March out to $6.90 on slowing exports, and poor sales this morning in lieu of continuing ASF problems.
- December soyoil started out the day by attempting to take out previous trading range highs of 3076c, but found profit-taking as funds are probably long around 40K. Oils spreads remain firm, with Dec/March trading into 49 pts from 51 pts.
- Domestic bean basis slips lower from the highs as harvest continues to roll in.
GRAINS
- Wheat prices were once again well bid from the opening bell, setting new chart highs for the upside break-out over $5.00 in Dec. The wheat market remains well bid as more short-covering continues for the week. However, wheat is getting support from lower production out of Australia (19 mmt down to 15 mmt), problems in Argentina, and higher European wheat prices (highest point in 3 months) on higher demand. Ideas were also in place that soft wheat supplies could tighten moving forward.
- Dec wheat/corn traded from 1.28 3/4c up to new highs at 1.37c.
- Dec corn prices opened lower but commercial pricing ideas and consumers were waiting to get something priced. Spillover strength from wheat helped corn prices to firm. Harvest pressure continues to weaken cash with spreads corn opening wider, but gaining more strength as early values held.
- Dec/March corn narrowed into 11 1/2c from 12c, but Dec 19/Dec 20 trades out to 19 1/2c from 15 1/4c.
AT MIDDAY THE MARKETS ARE AS FOLLOWS:
HI LO
Nov beans: 6 higher 9.38 1/2 9.30 1/2
Dec meal: 2.50 higher 309.80 306.10
Dec soyoil: 11 higher 3060 3033
Dec corn: 2 lower 3.95 3/4 3.89 3/4
Dec wheat: 4 higher 5.29 1/2 5.21
Jan canola: 1.50 lower 465.90 463.20
OUTSIDE MARKETS
The Dow opened off 40 pts. and traded off 80 pts by midday. China's economy slowed to a crawl with Q3 GDP at 6.0%, the slowest pace in nearly 30 years. The US dollar continues to weaken trading down to 97.47 as money managers unwind previous buy the US dollar/sell the British Pound trade.
CLOSING COMMENTS
Funds continue to build bean length against a corn short. Tonight, we get the commitment-of-trader's report and it should show funds an estimated net short 115K short corn, short 6K wheat, long 35K beans, short 30K meal, and long 40K soyoil.
Macro headlines continue to play into recent price action. There is plenty of skepticism as regards the Brexit deal, nonetheless money managers responded by unwinding previous buy US dollar/sell British Pound trade. There is still plenty of skepticism for a US/China trade deal, with any hiccups sending prices lower. However, at this point, shorts are cautious, and bulls have been emboldened as price risk is added to the soy complex.
There is one fact that the market knows, which is that the storm last week brought an end to bean production in the northern cornbelt. How much production has been lost for beans and corn is reason enough for a bull to jump aboard. Seasonally, beans tend to gain on corn this time of the year and heading into a possible deal signing would look for good bean pullbacks to own. Bears may also see a break in corn, but ultimately if a deal is signed those bears will probably exit as well. Net-net, prices have set new highs this week in some of the markets, and until we good reversal signal is noted higher prices could be in the works, despite very good harvest weather over the next 2 weeks.
ON THE CALENDAR:
Cattle-on-feed is due out after the close, with traders looking for on feed inventory to be slightly lower, and placements/marketings slightly higher.
Have a good weekend.......
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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