** ARC will release its weekend wire after the close and return to its normal production schedule on Sunday.
** The morning has been mixed at the CBOT with soybeans trading both sides of unchanged while the grain markets trade mostly lower. Wheat has been the downside leader while soymeal continues to push to new highs. The volume of trade has been holiday restricted with December options to expire at the close. The market is paying attention to the December option expiration with soybeans pinning the $10.00 strike while December Chi wheat targets $4.20 while corn is in the middle of the $3.40 and $3.50 strikes. ARC’s bet is that the CBOT will closed mixed today, and follow the pattern of a seasonal top being forged on the day following Thanksgiving – with prices to retreat in the days heading into 1st notice days next week Thursday.
** CBOT brokers report that funds have bought 2,100 contracts of soybeans while selling 2,500 contracts of corn, and 1,800 contracts of Chi wheat.
** In soybean products, funds have bought 3,100 contracts of soymeal while selling 1,600 contracts of soyoil. Liquidation of the oil share trade persists, but next week’s EPA decision on the US biofuel mandate will key longer term price direction of the spread. ARC research suggests that the oil/meal spread is nearing a bottom.
** Weekly US export sales were disappointing for everything but soymeal. The sales totals were well below levels to reach USDA’s annual target. The US sold 7.3 Mil Bu wheat, 42.6 Mil Bu of corn, and 31.9 Mil Bu of soybeans. In soyoil, the US sold 4,200 MTs and 379,800 MTs of soymeal. The meal sales were to the Phillippeans and Mexico. US exporters must have discounted their prices to garner the sales with Brazilian soymeal some $28-29.00 cheaper for December and January. Brazilian meal has a sizable advantage via the Gulf.
** For their respective crop years to date, US wheat export sales stand at 624 Mil Bu which are 7.5% behind last year, US corn sales of 843 Mil Bu are 311 Mil Bu or 27% below last year, while US soybeans sales are off 254 Mil Bu or 17%. The US sales pace to date argues for a US 2017/18 soybean export pace of under 2,100 Mil BU or some 150 Mil Bu below the WASDE forecast.
** Brazilian farmers have been moderate sellers of cash soybeans as spot CBOT futures reach $10.00. Most private Brazilian crop watchers are raising their estimate of the 2018 Brazilian soybean crop to 111-112 MMTs. Such a crop would help offset any loss of Argentine production if dryness persists.
** Midday GFS South American Weather Update: The midday GFS is similar to the overnight run with Cordoba and La Pampa to see better rains in the Wednesday forward timeframe. A few lite showers are slated for the weekend across N Argentina, but most totals will be less than .25”. Temps remain cool before a slow moving warm front produces increased showers/storms from Wednesday into the weekend. Rain totals are estimated in a range of .5-2.00” across Cordoba, Western BA and La Pampa. No lasting warm temps are indicated with an additional chance of Argy rain noted in the 11-14 day period.
. Regular rains are offered for Brazil in the next 14 days with mild temps. The Brazilian corn and soybean crops are looking favorable according to AgResource Brazil. Notice that heavy rains will conitnue to build soil moisture across N Brazil where 4-8.00” will fall.
** AgResource Market Comment: It’s all about chart based buying with soymeal above key moving averages while soyoil tests support under $33.50. Corn and wheat futures are liquidating into 1st notice day and a secondary bottom should be scored late next week. Downside price targets remain; $4.00-4.10 in Dec Chi wheat and $3.30-3.35 in December corn, with January soybeans finding support below $9.70.
