** 6:30 AM CDT CBOT Prices: January soybeans are down 1.00 cent at $9.7525, Dec corn is unchanged at $3.3825, while Dec Chi wheat is up 1.75 cents at $4.2175.
** AgResource AM Grain & Oilseed Comment: Good Morning! Diminished volume and mixed has been the overnight CBOT trade. Soybeans, corn and wheat have traded either side of unchanged. The volume of trade to date has declined to just over 8,500 contracts of December corn, just over 10,500 contracts of January soybeans, and just over 7,000 contracts of December Chi wheat.
Wednesday’s CBOT open interest reflected another rise of 12,268 contracts in corn, 3,292 contracts in soybeans, and 3,211 contracts in wheat. In soymeal, open interest was up a hefty 6,033 contracts on a higher day. CBOT corn open interest is now at its best levels in nearly 10 years! The rise in corn open interest is surprising amid large US corn end stocks and lack of fundamental story.
Some market watchers wonder if new/sizeable index fund money is being put to work or its all end users that are taking long term forward coverage? The mixture of sizeable open interest and a record short fund position offers fodder for a sharp CBOT rally when a bullish fundamental spark is issued.
The USDA’s FAS will be issuing their weekly export sales report this AM. The report is expected to feature good US grain sales, but soybeans will again fall short of expectations. However, one has to remember that US 2017/18 soybean exports will be back loaded due to ongoing record large Chinese demand and reduced 2018 South American crop sizes. This will produce caution on the part of USDA to trim US 2017/18 soy exports too aggressively until there are measurable gains in Brazil’s 2018 soybean production.
Egypt’s GASC is tendering for world wheat for early 2018 shipment and received 6 offers from exporters. The lowest price is $194.55/MT which is up about $2/MT from their tender of last week. Russian FOB wheat prices are down $1-1.50/MT since then, so the exporters added some $3-3.50/MT to account for pytosanitary uncertainty regarding ergot and other wheat quality specs.
Limited rain is expected across Argentina in the next 2 weeks. A few lite showers are falling across far S Brazil this AM. Argentine dryness worry is expanding with a trend of below normal expected into early December with intermittent heat. There is no lasting heat that will be a pull on soil moisture, however, producers are waiting on rain before planting soybeans.
It’s December 10-15th when crop yield drags emerge on late seeding dates.
Midwest cash basis is rising on low US farm sales while the most bullish seasonal price trend is offered next week. Amid a market that is heavily short, ARC awaits short covering rallies for new sales opportunities.
** US 10 Day Rainfall Forecast and 15 day Temp Deviation:
