• HEADLINES: President Biden and Chinese President Xi to hold a virtual summit Monday; Soymeal rises above 100-day ma.

• Chicago ag futures have traded both sides in reduced volume from recent daily trading sessions. Corn and soybeans are the upside leaders while wheat follows. Managed money was a buyer following the morning Chicago reopening. The announcement of the Russian floating weekly export tax came as no surprise which was digested in Thursday’s rally. With Paris wheat futures unchanged, US wheat futures lack overseas leadership heading into the weekend. We look for a mixed close with cash strength in corn/soymeal/soybeans providing underlying support. Wheat values may “catch their breath” awaiting the next round of world trade demand.

• Chicago brokers estimate that funds have bought 5,400 contracts of corn, 4,300 contracts of soybeans, while being flat in wheat. In soy products, funds have been sellers of 2,100 contracts of soyoil and buyer of 2,900 contracts of meal

• The USDA/FAS announce the sale of 256,930 mt of US soybeans to an unknown buyer. Most of the sale is rumoured to be heading to China.

• FAS weekly export sales were within trade expectations. For the week ending November 4, the US sold 10.5 million bu of wheat, 42.0 million bu of corn, and 47.4 million bu of soybeans. And US sorghum sales were the best in months at 10.3 million bu. For their respective crop years to date, the US has sold 488 million bu of wheat (down 139 million or 23%), 1,262 million bu of corn (down 82 million or 6%), and 1,223 million bu of soybeans (down 608 million or 33% from last year). US sorghum sales stand at 129 million bu, down 31 million or 21%.

• We would note that WASDE 2021/22 soybean export forecasts are too high by at least 100-125 million bu, wheat too high by 15-20 million bu while corn is in line with historical averages. A further cut in the 2021/22 US soybean export estimate is forecast for December.

• US President Biden and Chinese President Xi will be holding a virtual Summit on Monday. It is the second time this year that both presidents will talk about the relations of both countries, their economies, trade, and climate goals. It is hoped that Biden will prod China to return to trade negotiations and review the Phase One Pact. Asian sources indicate that China would be willing to extend the Phase One deal if the US would reduce or eliminate 35% tariffs on $265 billion of Chinese goods. Reducing the tariffs would lower the cost of household goods coming into the US and help beat back inflationary pressures.

• Russia is again amassing troops/military hardware along the Russian/Ukraine border which has some fearing a new geopolitical conflict. The US warned Europeans that Russia may be weighing a potential invasion of Ukraine as tensions flare. The Russian Ruble has weakened on the news, with Moscow denying the US alert. We note that similar tensions erupted last spring when Russia amassed 100,000 troops along the border which eased after Biden called Putin and lined up a June Summit. If Russia were to invade Ukraine, it would be bullish as two key suppliers engaged in mutual aggression.

• The midday weather forecast is consistent in keeping rain/snow over the next 10 days confined to the far Upper Midwest and Great Lakes. No threats to the completion of harvest are forecast across the Plains and principal corn/soy belt. Model guidance is colder across the Central US.

• Chicago soymeal futures have rallied above the 100-day moving average for the first time since July which is sparking new chart buying and the soybean rally. Oil/meal spread unwinding has been aggressive this morning. China is still bidding for Ukraine corn but shows no US interest. China is rumoured to be dropping their DDG duties in January to allow US imports to resume in 2022. Inflation buying of Chicago grain has been widespread since the November report, but this is no place to chase the rally.  Remember that bull markets always let you in.

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