Commentary

CBOT Called Mixed; Argentine Forecast Wetter Beyond December 1st

Nov 19, 1:30 pm | Sunday Commentary

** AgResource Pre Opening Sunday Market Calls: Soybeans 1 cent lower to 2 cents higher, corn and wheat steady to 1 cent lower.     ** Sunday Weather & Market Comment Discussion: CBOT opening week calls are mixed to slightly lower. The forecast is slightly wetter for Argentina in the next 5 days with much better rains in the 11-15 day period. It’s too early for any real weather concern for Argentina with much of the crop still in the bag and the timing for weather adversity similar to April 19 across the Midwest. The dryness really has to get beyond December 10th (May 10th in the Midwest) to discuss any yield drag due to latent seeding dates.   Friday’s CFTC report showed…

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Wheat Benefits From Short Covering, Wet Weather in Australia

Nov 17, 3:40 pm | Wheat

US wheat futures rallied 4-6 cents, mostly amid strength in corn and a lack of meaningful rain included any Argentina’s two-week forecast. Managed funds’ net short position in Chicago as of Tuesday totaled 109,000 contracts, down 16,000 from the prior week but still rather large. Fundamentally, more attention needs to be paid to Australian precip in the coming weeks, as La Nina’s impact there is occurring at exactly the wrong time.   The 8-15 day outlook in Australia has trended drier – no longer is there risk of flooding – but a pattern of above normal rainfall is probable into mid-December. The CFS model’s latest 16-30 day outlook is at left; E Australia’s wheat belt is highlighted. At the least this…

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Funds Begin Exiting Short Positions; Moving Averages Targeted:

Nov 17, 3:38 pm | Corn

The CFTC this afternoon confirmed that, as of Tuesday, managed funds held a record net short position worth 231,000 contracts. Even following today’s rally, ARC estimates funds’ position this evening at a net short 230,000. As seasonal trends point upwards in late Nov, profits are being taken. Argentina remains dry. China is rumored to have secured several cargoes of US corn, and the Brazilian real is noticeably stronger today. A secondary bottom has likely been scored.   Notice in the graphic that extreme short positions rarely last beyond a few weeks. While massive supply dislocation is needed to change the structure of grain markets, a short term rally effort very likely lies in the offing. Note, too, that operational models…

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Afternoon Weather Update

Nov 17, 3:38 pm | Weather

Weather Favorable in Brazil; Still Too Dry in Argentina: Over the next 10 days the mean position of South America’s jet stream will stay aligned just north of major Argentine growing areas. This will force ample moisture into the whole of Brazil through late November, which is a positive, but will also work to strip rainfall potential from Argentina. Cumulative Oct-Nov rainfall in Cordoba, Argentina, which accounts for 30-35% of the country’s corn & soybean production is attached. There’s only a “loose” correlation between Oct/Nov rainfall in yield, but declining soil moisture there become more important by mid-December. Only lite showers are offered to Argentina over the next two weeks.   However, near daily showers will continue in Central Brazil,…

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US Feeder Cattle and Hog Imports

Nov 17, 2:07 pm | Cattle, Hogs & Pork

Despite a larger US cow herd and inventory of feeder cattle, feeder cattle prices have generally been above last year since May, with the cash feeder index this week at $158 versus $120 a year ago. Higher prices have not only benefitted the US cow/calf producers, but have also helped out other North American producers. Cumulative feeder cattle imports from Mexico through early October are up 28% from a year ago and total just under 885,000 head.   While imports of Mexican cattle have increased over last year, imports of Canadian cattle continue to decline. The latest trade data shows YTD imports from Canada are just short of 108,000 head, and are down 35% at a 6 year low. Volatility…

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Soy Futures Rally Back Ahead Of The Weekend

Nov 17, 2:07 pm | Soybeans

Soybean futures marked good gains at the end of Friday’s trading, with the market finding support from fund short covering ahead of the weekend, and Argentine weather concerns. Soybean meal was the price leader through Friday’s trade as funds covered meal/oil bear spreads. At the close, soybeans were up 13-14 cents and back above all major moving averages, with meal gaining $5-6/ton. For the day, funds were estimated buyers of; 10,000 soybean and 7,000 soymeal contracts, and bought 500 contracts in soyoil.   While soymeal rallied to end the week, meal basis across the Midwest holds at multi year lows at many locations. The Central IL Processor’s report has quotes in a wide range from -$25 to +7 Dec, while quotes…

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Hogs Close Mixed On Friday, Lower For The Week

Nov 17, 1:42 pm | Hogs & Pork

It was sharply mixed day of trade to end the week. February hogs initially found support under major moving averages and were $1.50 higher at midday, however the market could not hold on to early gains and was back towards unchanged by the close. The CME’s lean hog index was down $.40 at $65.67 for the third consecutive weekly decline.   The price for weaned pig in the spot market bottomed in August and has since mounted a fairly typical seasonal recovery, with Autumn quotes holding well above last year, but still short of the 5 year average. However, the market has started to stall as forward margins have turned down on weaker spring hog futures prices. The USDA this…

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CBOT Takes Back all of Thursday’s Decline as China Rumored to Have Bought US Corn

Nov 17, 11:03 am | Mid-day Commentary

** Green is the color of the morning as CBOT wheat, corn, soybeans gain into the midday hour. Soymeal/soyoil spreading has been noted on the dry weather trend that prevails across Argentina and the uncertainty surrounding the biodiesel mandate that has to be announced by the EPA before November 30th. Argentina is the world’s largest soymeal exporter, so if the La Nina inspired dry weather trend were to persist into early 2018, the market impact would be squarely on CBOT soymeal. Corn and wheat appear to be entering in a short covering market mode heading into next week’s holiday shortened trade. Seasonally, it’s the time of the year that CBOT prices rally as farmers finish harvest and have no interest…

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Pre Weekend Short Covering on CoT report and World Weather Concern

Nov 17, 6:59 am | Morning Commentary

** 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…

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