- Chicago futures are higher at midday as the trade prepped for President Trump’s address to the NY economic club. Wheat has been the upside leader at midday, with funds covering a sizeable net short position in KC and concern over bitterly cold temperatures across the Southern and Western Plains. Spot futures have broken through the first series of chart-based resistance. The EU wheat market has followed, and world wheat fob quotes this evening will be firmer. March corn has found support at its 100-day moving average.
- Trump’s speech highlighted US crop creation, rising median incomes and the surge in US energy production. Trump also highlighted the need for fairer US trade deals. However, details regarding US/Chinese trade progress, including the signing of a Phase One agreement, were absent. Phase One maybe completed, but a timeline is lacking. Our view that both countries’ willingness to ease existing and future tariffs is key.
- The Dow has rallied 50 points to new record highs. Spot crude is unchanged.
- US export inspections through the week ending Nov 7 included 22 million bu of corn, vs. 11 million the prior week; 19 million bu of wheat, vs. 11 million the prior week; and 49 million bu of soybean, vs. 54 million the prior week.
- Weekly export shipments were broadly in line with trade expectations. Wheat and soy shipments are keeping pace with the USDA’s annual forecast. However, recall US corn export shipments need to average 38 million bu per week to validate the USDA’s 1,850 million bu forecast.
- For their respective crop years to date the US has exported 170 million bu of corn, down 61% on last year; 400 million bu of soybeans, up 9% on last year; and 421 million bu of wheat, up 23% from early Nov in 2018.
- FAS’s daily reporting system this morning is void of new demand.
- The midday Central US forecast has shifted meaningful snowfall late next week southward in NE and southern SD. The coverage of snow will be less than previously indicated. Yet, the remainder of corn harvesting will be challenging via current snow cover, which will fuel ongoing bitterly cold temperatures over the next 3-4 days. Rising drying costs will keep the arrival of new crop corn into the cash pipeline slowed.
- The midday GFS weather forecast has pulled better Argentine rainfall into the 10-day forecast, with soaking totals of 1-3″ to be widespread across key areas of Buenos Aires and Cordoba. Dryness lingers in Central Argentina, and it is crucial that EU and GFS model forecasts materialise. Rain is scheduled to begin in Central Argentina late in the coming weekend.
- The forecast in Brazil is unchanged. A pattern of near-daily showers will persist into Nov 26. The market will more acutely measure precipitation totals and coverage in early December. For now, S American weather is viewed is non-threatening.
- A lasting trend won’t be established until US/Chinese trade progress is better known, and operational weather model guidance begins to peek into S American precipitation in mid-December.