** 6:30 AM CDT CBOT Prices: January soybeans are up 4.00 cents at $10.0225, Dec corn is unchanged at $3.485, while Dec Chi wheat is up .50 of a cent at $4.27.
** AgResource AM Grain & Oilseed Comment: Good Morning! It’s USDA Crop Report Day when the most active volume of the month is expected for CBOT corn, soybeans and wheat. Traders and funds gear up to trade the USDA report (and the day following) with volume often sagging thereafter into the US Thanksgiving Day holiday. CBOT values overnight are mixed with soybeans continuing to gain on the grains. Funds favor long soy vs short grains.
A push above last week’s high of $10.005 in January soybeans has fueled additional chart based buying. January soybeans are within a dime of the high set following the October USDA crop report. The grains have tried to follow in rather normal volume overnight.
The average trade guess for the 2017 US soybean yield is down .1 BPA (from October) at 49.3 BPA. Yet, the whisper number that traders are worried about is a yield of 48.9 BPA – down .5 BPA from October. This yield decline could potentially drop US 17/18 soybean end stocks below 400 Mil Bu!
The 2017 US corn yield is expected to gain 1-2 BPA and add to the big pile that exists. ARC sees 2017/18 US corn end stocks closer to 2,500 Mil Bu. Such US corn stocks are historically large, but funds are sitting on a record corn short with farmers unlikely to sell much of their new crop at depressed prices. Moreover, WASDE looks to trim its Black Sea corn production estimate with 2017/18 world corn stocks looking far less bearish (than the US).
Brazil’s CONAB estimated their 2018 soybean harvest in a range of 106.4- 108.63 MMTs with corn at 91.6-93.05 MMTs. Both estimates are close to the USDA October forecast of 107.0 MMTs for soybeans and 95.0 MMTs for corn. It’s still too early to make any real assessment of Brazilian corn/soybean crops with planting just 60% completed with the entire growing season ahead.
European wheat futures are up .50 euros/MT with Paris Dec at $161.00/MT. Malaysian December palmoil futures closed 13 ringgits lower at $2,786/MT.
South America weather is favorable for the next 10 days. Additional rain will benefit Northern Brazilian soy crops through the weekend while needed dry weather advances spring planting across Argentina and S Brazil. High temps range from the mid 70’s to the lower 90’s – which is close to seasonal averages. There is a rain chance for Argentine growing areas mid next week.
China will allow 11% VAT tax exempt imports of US DDGs, but have not ended the 53.7% import or the 11-12% anti subsidy duty. The move is seen as a help, but it will not allow for unfettered imports of US DDG’s. And China signed framed contracts for 12 MMTs of US soybeans worth an estimated $5 Bil. The signings have been well rumored and were not a surprise.
Good luck with the report! It will be interesting to see if funds can continue to push their long soybean/short grain spreads after the USDA data?
** 10 Day North American Rainfall Forecast:
** 15 Day Temperature Anomaly:
