THE OPEN

Jan beans:  2 lower

Dec meal: .40 lower

Dec soyoil:  3 lower

Dec corn:  3/4 higher

Dec wheat:  1 1/4 lower

The markets opened as expected but without any further confirmation of US/Chinese trade negotiations, the path of least resistance remains lower.  Grains were weaker led by wheat, while oilshare prices found new strength as soyoil futures followed a firmer palm oil session.  During the session, NY Fed Pres Williams talked about the Fed and the economy, saying that if GDP continued to grow at 2%, then investment would as well.  Stocks opened lower, and spent much of the trading session in the red, while crude oil prices and the US dollar weakened from overnight trade.  

SOY

• Beans opened as called but trended weaker during the session with meal, which broke under traders returning to a buy soyoil/sell meal trade.  
• Overnight palm oil and crude oil supported soyoil futures near chart lows, as traders bought oilshare once again.  Dec soyoil prices turned higher after the open, which brought in more buying on chart recovery, looking ready to re-test 31c again.   
• Jan oilshare firmed to 33.74% as crush values remain a firm 97c/bu.  
• Despite rumors of bean business, negative headline news joined negative chart signals to promote further downside price action.  Jan beans opened on Sep lows at $9.12, finding some small bottom picking.   
• Nov beans expired quietly at noontime with values trading down to $9.00 1/4c.  
• Jan/March beans maintained a steady 13c-13 1/2c trade while Dec/March meal widened out to $5.60.  Volumes were extremely light as prices worked downward with small bottom picking as Jan beans fell towards the $9.10 level of key support.  
• Buyers continue to remain patient, letting prices come to them as they see no reason to pay up under more negative headlines than positive ones.  

GRAINS

• Corn prices continued to congest in a sideways price pattern, finding some support from buy corn/sell bean and wheat trade.  
• The ethanol data in the EIA was friendly, finding a much larger-than -expected draw in stocks.  Production was up 1.6% to a 1.030 mln bbl/day rate, which would consume 5.40 bln bu of corn.  
• Corn spreads relaxed somewhat as the index rolls come to a completion.  Dec/March corn traded out to 9c from 8 1/2c, and from values that were closer to 7 3/4c.  Traders were said to be bear-spreading on the strength, viewing demand as slow and carry-out this year and into next ample.  
• Dec wheat values dropped as temperatures warm up as weather returns to more normal levels.  
• KC values were weaker than Chicago, as more selling emerges on chart weakness.  
• Dec wheat/corn trades from 1.32 1/4c to 1.30c.  

During the session US Trade Rep. Lighthizer and US Sec of Ag. Sonny Perdue officially welcomed Brazil's implementation of an annual duty-free tariff rate quote (TRQ) of 750,000 tmt of wheat imports.  Lighthizer stated, "We look forward to increased exports of American wheat to Brazil."  In the meantime, it was announced that Egypt purchased 465,000 mt of Russian and Ukrainian origin in yesterday's tender.

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                    HI                       LO

Jan beans: 3 3/4 lower              9.17 1/2              9.11

Dec meal:  2.20 lower               305.00                301.60

Dec soyoil:  25 higher                3081                  3046

Dec corn:  1/2 higher                 3.77 1/2             3.74 1/2

Dec wheat:  2 lower                  5.12                    5.05 1/2

Jan canola: .30 higher              463.80                460.80

 OUTSIDE MARKETS

The Dow opened 35 pts lower and was off 84 pts at midday.  Crude oil worked lower on profit-taking, trading in the red at $56.83/barrel, while the US dollar traded down to 98.15.

CLOSING COMMENTS

Prices are grinding lower with the operative word "grind".  Funds remain long beans/short corn, and for the moment price erosion is the name of the game for beans while corn remains a sideways trade.  March corn will soon become the focus moving forward as we head into the last part of November, while Jan beans will likely find support if they move down towards the $9.00 level.  However, if short beans would be cautious and take a profit on this negativity on more technical weakness.  Bean carry-out has worked consistently lower from what was over a 1.0 bln bu carry-out to 475 mln bu, and yet prices are only about 30c higher than a year ago.    

South America may have a record crop year, but between now and harvest there is a long way to go.   Think that beans may work lower, but would look for places to cover a short and try the long side if Jan can test $8.95/$9.00.  March corn could be a sale, but is still trapped in sideways ranges, as is wheat despite today's weakness.  Markets can work lower but are beginning to feel a bit sold out at these levels, waiting for the next headline to make or break the market.

Have a good evening........

FYI DEPARTMENT

Washington, D.C., November 14, 2019 – United States Trade Representative Robert Lighthizer and U.S. Secretary of Agriculture Sonny Perdue released the following statement on China’s decision to lift its ban on poultry imports from the United States:

“The United States welcomes China’s decision to finally lift its unwarranted ban on U.S. poultry and poultry products. This is great news for both America’s farmers and China’s consumers,” said Ambassador Lighthizer. “China is an important export market for America’s poultry farmers, and we estimate they will now be able to export more than $1 billion worth of poultry and poultry products each year to China. Reopening China to U.S. poultry will create new export opportunities for our poultry farmers and support thousands of workers employed by the U.S. poultry industry.”

Secretary Perdue said, “After being shut out of the market for years, U.S. poultry producers and exporters welcome the reopening of China’s market to their products. America’s producers are the most productive in the world and it is critical they be able to sell their bounty to consumers in other parts of the globe. We will continue our work to expand market access in important markets like China as well as other countries, to support our producers and U.S. jobs.”

 

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