** 6:30 AM CDT CBOT Prices: January soybeans are up 4.50 cents at $9.7225, Dec corn is up .25 of a cent at $3.33775, while Dec Chi wheat is down 1.25 cents at $4.2675.
** AgResource AM Grain & Oilseed Comment: Good Morning! The overnight CBOT trading session is mixed (again), a theme that has been evident since last week’s USDA Nov crop report. The volume of trade has expanded with more than 18,000 contracts of Nov soybeans, more than 22,000 contracts of Dec corn, and nearly 5,000 contracts of December Chi wheat changing hands.
CBOT corn and soybeans have been seeking lower values in the wake of the USDA report on fresh fund selling. On the other hand, US farmers have slammed shut their bin doors with basis gaining in the interior as end users seek supply at the lower prices. Traders are wondering with the US soy and corn harvest virtually complete, if the market won’t have to bid supply away grain from the farmer? This is a new line of thinking as the seasonal price trends ahead of Thanksgiving are normally the most bullish for the year.
CBOT open interest expanded another 18,780 contracts on Tuesday, with soybeans up 592 and Chicago wheat down 3,199 contracts.
Funds are now sitting on a record short corn position that is measured by ARC at close to 230-235,000 contracts. Funds have been huge sellers of corn on the post November crop report decline as December corn futures takes aim on the $3.30-3.35 lows set by September during its expiration.
China’s main grain trader COFCO, at a conference in S China, announced that China would import 100 MMTs of all origin soybeans, a new record and up 3 MMTs from USDA’s November estimate. Such imports are up 6.5 MMTs from last year and would continue a trend of record large global soy demand. Note that a 106-108 MMTs Brazilian soybean crop (down 6-8 MMTs) from last year, and likely smaller Argentine soybean seeding would place sizeable export demand into the hands of the US in the last half of the 2017/18 crop year.
China’s ag ministry reduced their estimate of their hog herd in November citing a continued fight against pollution. However, China hog herd numbers and meat production data has become extremely unreliable as most producers are dramatically undercounting hogs so that they do not become subject to the next pollution herd liquidation order. ARC would advise extreme caution in using any Chinese livestock data as they have become totally unreliable.
Limited rain is expected across Argentina in the next 2 weeks. A few lite showers are falling across Buenos Aries this AM. Dryness worry is expanding with a trend of below normal expected into early December with intermittent heat. With La Nina in place, the trend of below normal rainfall has to be followed more closely with soybean farmers waiting for a germinating rain.
The Brazilian real has lost another 1% against the USD and is trading at 3.315 while the Russian Ruble is slightly lower at 60.30 rubles/USD.
The only thing bullish about the CBOT is how bearish the entire industry is!
** 10 Day EU model Rainfall and 14 Day Temperature Anomalies:
