** 6:30 AM CDT CBOT Prices: January soybeans are up 3.00 cents at $9.75, Dec corn is up 1.25 cents at $3.3775, while Dec Chi wheat is up 2.75 cents at $4.2425.
** AgResource AM Grain & Oilseed Comment: Good Morning! The CBOT trade started out mixed, but turned higher in AM hours. Too much rain for the E. Australian wheat crop, too dry of weather for Argentine summer row crops, and funds holding a record net short grain position produced the bounce.
The volume of trade was active in corn (over 26,000 contracts of December futures – mostly spreads) while being meager in soybeans and wheat (just over 7,000 contracts of January soybeans and just over 4,000 contracts of December Chi wheat).
Thursday’s preliminary open interest was up another 16,114 contracts of corn, up 7,082 contracts of soybeans, and down 3,709 contracts of Chi wheat.
The rise in CBOT corn open interest remains somewhat baffling.
Paris wheat futures are unchanged basis December at $158.75 euros/MT, while China’s Dalian corn closed 3 yuan lower with soymeal futures slightly higher. Malaysian palmoil futures closed slightly lower following soyoil.
There just is not much fresh demand news available for the marketplace outside of world weather and the coming CFTC CoT report.
Limited rain is expected across Argentina in the next 2 weeks while Brazilian crops will enjoy regular rains. The Argentine dryness worry is deepening with a trend of below normal expected into early December with intermittent heat. The next 6-7 days will feature seasonal temps across Argentina, but 90’s will return in the days following. Clients need to think as November being April and December being May in the US. If the dryness persists, it will start to have a drag on yields after December 10th.
More meaningful and sometime heavy rains are slated to drop across New South Wales, Victoria and Southern Australia that could damage their mature winter wheat crop. The month has already featured a steady parade of systems which is causing worry. The world does not need another source of feed, it demands high quality milling wheat for the Asian market.
ARC looks for this afternoon’s CoT report to reflect a record short corn position of over 245,000 contracts with a Chi wheat short of around 125,000 contracts, and a soybean long of 22-27,000 contracts. The focal point will be on the grains where the fund net short position is record large.
US farmers are finishing fieldwork and have slammed shut their bin doors in terms of cash sales. Cash basis bids for corn and soybeans are rising and at some point, the marketplace will have to help replenish low pipeline stocks.
For the week, CBOT wheat is down 9 cents, corn is down 7 cents with beans off 13 cents. The CBOT has continued to sag following the Nov USDA report. However, the Argentine dryness, Aussie wetness and rising Midwest cash basis is expected to produce a bounce on seasonal considerations.
