- It has been a weak and largely macro driven day in Chicago. US wheat futures have led the way down following Monday’s surge, with some light calendar spread unwinding noted. It is just tough to ignore another $2.50/barrel collapse in US and world crude futures. US crude stocks have recovered 37 million barrels (10%) since mid-September. The number of US rigs in operation has been growing through the boost in stocks. Whether OPEC moves to cut production in early 2019 will be watched with interest. It has been a record breaking move to the downside in energy prices.
- The US$ at midday is down 400 points, but currencies in S America are also weaker. The Brazilian Real has posted a 6-week low, which along with falling fob premiums keeps Brazilian soy prices attractive. Otherwise, there is not much ag-specific news available. The trade expects US corn harvest through Sunday to have reached 87% complete, with beans at 91%. US winter wheat conditions this afternoon are expected steady to slightly lower amid the early arrival of winter. Just how much winter wheat is left to plant across the Southern Plains will also attract attention.
- US export inspections through the week ending Nov 8 included 45 million bu of corn (vs. 51 million the prior week), 13 million bu of wheat (unchanged on the week), and 48 million bu of soybeans (vs. 46 million). All were generally within expectations. For their respective marketing years to date the US has shipped 437 million bu of corn, up 86% from last year, 364 million bu of soybeans, down 42% from a year ago, and 342 million bu of wheat, down 21%. Recall bean shipments a year ago in Oct-Dec routinely hit 65-90 million bu. US exporters sold 277,000 million mt of soybeans for 2018/19 delivery to an unknown destination. Indonesia’s recent interest in importing corn was filled with S American origin, though other details are lacking.
- The midday S American GFS weather forecast is almost completely unchanged. Pesky showers will persist this week across Buenos Aires, where a majority of wheat is grown, but otherwise a welcomed drier pattern will be established across Argentina into the latter part of November. Soaking rain will be ongoing Brazil, with cumulative totals into Nov 27 estimated at 100-170% of normal. Vegetation health in Brazil remains well above last year amid rapid planting.
- Crude’s plunge has been astounding, and the break continues despite the market being the most oversold since the mid-1980s. However, ag supply and demand is most important over any lasting period of time. Grain prices will hold until favourable weather and acreage expansion is confirmed. The soy complex needs ongoing US-China trade dialogue to trade above $8.90, basis Jan.