• EU wheat area forecasts for the 2019/20 season are now officially forecast lower (by the EU’s MARS unit). Heavy rainfall and cold conditions have impacted not just the UK but much of Western Europe (Germany, France, UK, Ireland and Benelux countries). The planting window is now officially over as soil temperatures have fallen, but it has been known for farmers to continue to plant winter wheat as late as January despite the inevitable reduction in yields. Returning winter wheat seed to merchants is an almost impossible task and rather than waste it, planting when conditions allow is an option. Spring wheat acreage is forecast to jump dramatically assuming sufficient seed is available.

• Early sown crop development is reported to be favourable whilst later sown crops are displaying some developmental delays. Central and Eastern European wheat crops were planted in better conditions and appear to be developing well.

• UK provisional wheat acreage has been cut 9% year on year to 1,645,000 ha from June’s provisional 1,815,000, which if realised would see the UK’s wheat crop area at its lowest since 2013, which also experienced a wet planting season. It is estimated that as much as half of the winter crop remains unplanted, and the provisional figures above could well be subject to some sizeable revisions in time. Of course, for late planting and spring planting to take place it will be necessary for conditions to return to a more “normal” pattern, which again leaves room for adjustments.

• Interestingly, the DEFRA “early bird” survey is scheduled to be rerun in the new year to provide some more hard data upon which decisions can be made.

• Chicago futures are lower in moderate to light volume with spreading the key feature ahead of first notice day on Friday. Active March-December corn spreading has been noted at 11 cents March premium while the short covering in Chicago wheat has slowed. Soybeans have broken down on the charts with a fall in January below $8.91. We look for a lower Chicago close with end users well covered into 2020 and their seeing no need to make forward purchases amid favourable S American weather. A S American weather problem or US/China trade deal needs to occur before bearish Chicago price trends will change.

• Chicago brokers estimate that funds have sold 6,200 contracts of soybeans, 4,300 contracts of soymeal and 1,000 contracts of soyoil. In the grains, funds have sold 2,000 contracts of corn while being flat in wheat. Some early selling in Chicago wheat uncovered additional fund buying.

• Brazil was willing to allow their currency, the Real, float lower. The Brazilian economic minister visiting the US stated that his country will not support the Real. This caused the Real to drop from 4.15 to 4.26:1 US$ in quick order. The currency move raised Brazilian new crop bids to farmers to 76-83 Reals/bag of soybeans, the best in the past five years. New crop corn bids range from 44-48 Reals/ bag, close to a record high. The financial incentives for Brazilian farmers to seed more soybeans/corn is strong. Winter Brazilian corn seedings could be record large based on today’s financial incentives. Chicago reflected the potential for a more aggressive Brazilian export posture.

• We would anticipate WASDE raising their 2019 Brazilian corn production estimate (last year) based on prevailing shipping data on corn. Last week Brazil exported another 1.035 million mt of corn. This is 675,000 mt more than the prior week and 360,000 million mt more than last year. Brazil has now exported 36 million mt of corn and likely will see that export total grow to 43 million mt by the final count.

• As to other corn exporters, Argentina shipped out 755,000 mt and the Ukraine 859,000 mt, while the US exported 605,000 mt of corn. At least into the end of the year, the US corn export pace does not look to be recovering, leaving a modest 3-4 month window in which it can compete against the Ukraine.

• Argentine Grain Tax rumours abound with most expecting the wheat/corn taxes to rise to 15% vs the current rate of 7%. Soybean taxes are pegged at 33-35%.

• The Argentine ag export tax hike is expected to be announced by Dec 6, before President elect Fernandez takes office on December 10. The Argentine Peso has fallen by 2% to 59.9 pesos vs the US$ this morning.

• The S America forecast is favourable with heavy rains for the dry central area. The rest of Brazil looks to see at least normal rain with any dryness focused on Argentina. This area has enjoyed heavy rains in the past 24 hours but follow up moisture will be required after December 6. The good news is that there is no evidence of any above normal temperatures for Argentine crops with highs in the 70′s to the mid 80′s. The Brazilian new crop soybean crop is off to a favourable start.

• The strong US$ is the talk at midday with S American cash grain prices to farmers at or nearing 5-year highs (in their respective local currencies). Farmers are currently seeding and final seeded area could end up being larger due to better profits. No fresh news is offered on a US/China trade deal with the US silent on progress. Chicago trends are down and few users want to extend their forward coverage ahead of US holiday.

• Wheat futures are higher on short covering amid the lack of deliverable Chicago receipts and the modest gain in EU values as wet weather continues a slow the seeding pace in the UK, Italy and France. EU farmers can seed wheat well into February without much yield loss, but as of today, too much rain/saturated fields are keeping planters in the sheds. Corn is caught between the sag of soybeans and the gains in wheat. US corn export demand has improved marginally, but it is not enough to sustain a recovery. We look for a mixed close with Chicago traders awaiting news on a US/China Phase One Deal. We maintain that it is in the interest of both US President Trump and Chinese President Xi to reach some sort of trade truce before December 15.

• Chicago traders estimate that funds have sold 2,300 contracts of soybeans, while buying 1,200 contracts of corn and 2,400 contracts of wheat. In soy products, funds have sold 3,100 contracts of soyoil while buying 300 soymeal.

• US export inspections for the week ending Nov 21 were; 23.8 million bu of corn, 71.4 million bu of soybeans, and 15.5 million bu of wheat. The soybean exports were larger than expected (largest in 2 years) while the grains lagged. China took 37.2 million bu of US soybeans last week (52% of the US weekly total), the largest weekly export total for US soybeans to China since the trade war started in June of 2018.

• For their respective crop years to date, the US has sold 220.4 million bu of corn (down 298 million bu or 57%), 528.5 million bu of soybeans (up 80 million bu or 18% from last year), and 453.9 million bu of US wheat (up 82 million bu or 22%). We estimate that China has yet to ship out about 5 million mt of US soybeans. We expect that China will more regularly export 1 million mt/week into the end of the year. The biggest problem for US soybeans is that China has nearly used up its 10 million mt of tariff free import allocation. A trade deal is needed for US soybeans to keep flowing to the world’s largest soy importer

• The Chicago/Minn wheat spread has rallied to an historically unusual $0.335 Chicago premium. HRS Minn wheat has not traded at such a sharp discount since September 2007. On a spot basis, the record high for Chicago SRW vs HRS was in August 2007 when Chicago traded at an 80-cent premium to HRS.

• The Brazilian weather forecast is ideal with heavy rains for the dry central area. The rest of Brazil looks to see at least normal rain with any dryness focused on the southern half or third of Argentina. This area has enjoyed heavy rains in the past 24 hours but follow up moisture will be required after December 5. The good news is that there is no evidence of any above normal temperatures for Argentine crops with highs in the 70′s to the mid 80′s. The Brazilian new crop soybean crop is off to a favourable start with at least trend line yields expected.

• Chicago soybeans sinking on improved Brazilian weather and the potential for trend line (or above trend line) yield should the weather pattern hold through December. Chicago wheat is rising on sharply on fund buying tied to no receipts in deliverable positions against Chicago futures and last week’s high being exceeded. Corn is caught in the middle with spreading being sizeable. The Chicago wheat move is largely fund inspired with US wheat prices moving to deeper premiums vs. other world exporters.

• Chicago values are mixed at midday with corn firm, while soybeans and wheat are weaker. It is a reversal of yesterday’s trend. Chicago is lacking direction and we expect this chop/chop to persist into the US holiday next week. Few traders are interested in raising their risk profile amid existing trade and political uncertainty. We look for a mixed Chicago close with selling on rallies due to favorable S American weather. Dec/March corn spreading is robust with gains in open interest of 42,000 contracts noted.

• Chicago brokers estimate that funds have sold 3,000 contacts of wheat and 3,100 contracts of soybeans, while buying 3,300 contracts of corn. In soy products, funds have bought sold 3,600 contracts of soyoil while buying 1,100 contracts of soymeal. Profit taking in soyoil has been featured as the funds bank profits on weaker Asian cash prices and overbought conditions.

• Traders worry that with the “US Support of Hong Kong Bill” on the desk of US President Trump, that this signing will alter China’s stance on US/China Phase One trade deal. We doubt that that will be the case as China offered to invite to the USTR head Lighthizer and Sec Treas Mnuchin to Beijing knowing that the Bill was likely to be signed by Trump.

• We suspect that China will be willing to go forward with trade negotiations regardless of US support of the Hong Kong protesters. Worry is something that traders are always good at, but trade negotiations will broaden and deepen heading into the December 15 US tariff increase threat on $157 billion US$. The risk in the marketplace is that the US Deputy Trade officials accept China’s offer and head to Beijing early next week.

• US weekly export sales came in as expected. For the week ending November 14, the US sold 16.1 million bu of wheat, 31.0 million bu of corn, and 55.7 million bu of soybeans. China showed up as securing 20.9 million bu or 37% of the US soybean total. China has bought 8.5 million mt of US soybeans (312 million bu) with 3.1 million mt sold in an unknown destination classification (114 million bu). We suspect at least half of the unknown sales will be switched to China. This means that China has nearly performed on its pledge to secure 10.0 million mt of US soybeans duty free. Large new Chinese purchases will require a trade deal or a new allocation of duty-free licenses.

• Midwest corn farmers are fretting at the cold/wet weather forecast with an estimated 2.2-2.4 billion bu of corn likely to be in the field at Thanksgiving. Cold/dry weather is needed to accelerate the harvest with Midwest soils muddy/saturated. Any Upper Midwest corn harvest that waits until spring could endure yield losses of 20-40%. The market will become sensitive to US corn harvest and weather into December.T he good news is that the midday GFS forecast has taken rain/snow further south into the Delta.

• The midday GFS weather forecast offers needed rain for N Brazil/S and C Argentina in the next 10 days. Any dryness is centered on Paraguay and the southern third of MGDS. Otherwise, the forecast is favourable with improved crop conditions the result. For the vast majority of the S American corn/soy crops, soil moisture is favourable.

• Chicago values are chopping sideways with favourable S American weather and uncertainty in US/China trade capping rallies. Corn prices are being underpinned by the amount of crop that is likely to be left in the field in mid-December. December option expiration is Friday while first notice day is the day after Thanksgiving. It is US/China trade that keys price direction into the December holidays.

• Chicago values are mixed at midday. Soy futures are holding firm while the grains ease in low volume. The market is adrift with headlines directing daily price direction. Today’s headlines relate to the US/China trade war and that US President Trump is willing to place additional tariffs on China if there is no Phase One deal. We assume that Trump will not want to wait beyond December 15 to install the new tariffs. The on-and-off again Phase One Deal is driving US ag valuations daily. Unfortunately, we do not see this changing.

• Chicago brokers estimate that funds have sold 4,600 contracts of corn, 2,900 contracts of wheat, while buying 1,900 contracts of soybeans. In soy products, funds have bought 4,200 contracts of soyoil while selling 1,200 contracts of meal. We note that daily buying by funds is pushing their net long soyoil position close to a record at just over 98,000 contracts.

• US President Trump indicated that the US/China will continue to talk as they work to see if a deal can be achieved. The market is pessimistic on a Phase One Deal with US Hog futures sharply lower for their sixth day in a row. US pork is the cheapest by far from world suppliers, but China demand has been constrained by trade politics.

• Russian wheat seeding is record large and continues to grow based on an extended seeding season. Dryness remains a worry, but the crop needs just a few good rains before heading into dormancy. Rosstat will release their 2020 winter seeding data in late December, but initial private forecasts call for a 2-3% increase. Assuming trend yields, initial Russian wheat production estimates for 2020 should be clustered between 80-82 million mt. This compares to this year’s harvest which should come in between75-76 million mt.

• Farmers are wondering how much US corn/soybean yields could fall in the USDA January Crop Report. Cold, snow and extreme wetness is causing widespread struggles by farmers to bring in their harvest. Yet, historically the January USDA crop report has not produced large yield variance since 1973. The biggest decline in US soybean yield from November is 1 bushels/acre while corn is 2 bushels/acre. We would look for a 1 bushels/acre decline in the US corn yield to 166 bushels/acre and a modest 0.4 bushels/acre decline in soybeans. This decline will not be enough to offset US export losses meaning that 2019/20 US end stocks will not push substantially lower.

• US ethanol production was little changed from last week at 304 million gallons. US ethanol stocks declined to 862 Mil gallons vs 881 Mil last week which are down 10% on last year. Futures based US ethanol margin production profitability has bounced to 2 cents/gallon from break even 3 weeks ago.

• The midday S American GFS weather forecast is similar to the overnight run with needed rain for Argentina and Northern Brazil. Any dryness will be centred on Paraguay and the southern third of MGDS. Otherwise, the forecast is favourable with improved crop conditions the result. Any real heat is absent or confined to just a few days. For the vast majority of the S American corn/soy crops, soil moisture is favourable. The upcoming Argentine rains are needed and should aid newly seeded corn/soy crops.

• Chicago corn has pushed to new lows on fresh fund selling. A fundamental spark is needed via either adverse S American weather or a US/China trade deal to produce meaningful short covering. Otherwise, Chicago values look to slowly ease in the case of corn or chop sideways in wheat/soybean futures. This is no place to turn bearish with December option expiration on Friday.

• It is a different day and a different market. Chicago futures are bouncing with corn, soybeans and wheat futures higher at midday. The increased US export competitiveness in world grain trade has offered support along with end user buying for Q1. US President Trump stated that he is very happy with the state of US/China trade negotiations but will add tariffs if the talks fail. We note that each day the US/China trade talks wax and wane and today appears to be a step forward. The headline reading algos take President Trump’s comment as a buy in the grain and soy markets, at least for today.

• Chicago brokers estimate that funds have bought 4,700 contracts of corn, 2,300 contracts of wheat, and 2,900 contracts of soybeans. In soy products, funds have bought 3,200 contracts of soyoil along with 700 contracts of soymeal. The oil/meal spread continues to perform as tropical oil values rise.

• Bloomberg news is reporting that the $1.00 biodiesel credit is being worked by House Democrats, which would be phased over the next 5 years. The House Tax Writing Committee is proposing the $1.00 credit return in 2020 and run through 2021, and then be phased down to $0.75/gallon in 2022, $0.50 in 2023, and $0.25 in 2024, before it is eliminated. This sunset provision is offered to aid biodiesel producers that are struggling with today’s low margins.

• No mention is offered if the tax credit would go backwards (retroactive) to production since 2017. Chicago soyoil market has rallied on the news with December reaching above $0.31.

• More than 3,000 Canadian National Rail workers are on strike today, which has shut down Canada’s biggest rail line. The Union announced the strike overnight which has some US traders wondering if US wheat will be sought once spot Canadian export supplies are exhausted. The CN acts to serve much of Canadian ag industry and the length of the strike will be closely monitored.

• US farmers are struggling to harvest corn with wet conditions keeping the harvest slow. We calculate that more than 3 billion bu of US corn will be in the fields at the end of the week. The corn is slow to dry down and is increasingly becoming suspect to winter weather conditions. US farmers are struggling to harvest corn with much of the crop wet from the N Plains into the Upper Lake States. We note that NASS conducts its December 1 Stocks report right after the US Thanksgiving Day holiday, and field of standing corn will be difficult to measure.

• The midday GFS is slightly drier from the overnight run for S Brazil. No rain shortages are foreseen for N or C Brazil, it is the south where dryness could become a regional issue. The good news is that any real heat is absent or confined to just a few days. For the vast majority of the S American corn/soy crops, soil moisture is favourable. The upcoming Argentine rains are needed and should aid newly seeded corn/soy crops. Our worry for S American weather is in retreat into mid-December. Northern Brazilian soybean blooming starts in mid December.

• Brexit and the US/China Phase One Trade negotiations will be closely monitored by ag traders following the US Thanksgiving Holiday. Both political events should be resolved in December, they will direct ag values into yearend. US farmers should be closely watching cash basis levels with a top due in coming weeks. US corn demand should improve heading into 2020, but the rise will not be enough to counter export losses to date. December options expire on Friday.

• US/China trade talk worry was reported by CNBC around 7:00 am CST that turned the headline readers into “sellers” after the 8:30 opening. The news was that Beijing had turned pessimistic on a Phase One Trade deal due to US President Trump’s reluctance to roll back Chinese tariffs.

• China claims that such tariff rollbacks were promised in the mid October Washington DC meeting. The bearish headlines pressured Chicago corn, soybeans and wheat with volume active in the first 15 minutes of the trading day.

• Funds were active sellers of corn/soybeans with the wheat market gaining on the finding of new world demand. We look for a mixed Chicago close with the volume of trade declining at midday. Traders have heard trade rumours many times in the past 18 months and are becoming desensitised to the day to day news flow. It is late to become bearish of December corn below $3.65 or January soybeans below $9.00. Wheat is bouncing on several fresh N African tenders.

• Chicago traders estimate that funds have sold; 6,600 contracts of corn, 5,200 contracts of soybeans, and 2,800 contracts of soymeal. In wheat, funds have bought 3,600 contracts in Chicago while also securing 2,300 contracts of soyoil. The oil/meal spread continues to push to new rally highs as China’s vegoil and pork fat availability is compromised due to ASF.

• US exports for the week ending November 14 were 25.0 million bu of corn, 56.3 million bu of soybeans, and 16.5 million bu of wheat. The soybean export total was slightly larger than expected with 33.7 million bu being shipped out to China. The Chinese imports accounted for 61% of all US soybean weekly exports.

• US cumulative exports for their respective crop years to date are; 196.0 million bu of corn (down 275 million or 42%), 456 million bu of soybeans (up 49 million or 12%) with wheat at 438 million bu (up 77 million or 21%).The US wheat and corn export pace is sliding, but wheat is far enough ahead of last year for WASDE to hold onto their current annual export forecast. US 2019/20 US corn exports will likely be cut another 25-75 million bu in the December WASDE.

• Chinese importers report deepening delays with the offloading of soybean cargoes at port. Chinese importers secured the soybeans expecting that the US and China would have just signed the APEC Phase One trade deal, offering bullishness to the Chinese soy outlook. However, the APEC meeting was cancelled and more than 2.7 million mt of soybeans are now said to be delayed at port. We have concern that Chinese soybean port off loading delays will persist into yearend.

• The midday GFS weather forecast is slightly drier from the overnight run for S Brazil and S Argentina. No rain shortages are foreseen for North Central Brazil, it is the south where dryness could be a regional issue. The good news is that any real heat is absent or confined to just a few days. For the vast majority of the S American corn/soy crops, soil moisture is favourable. Although there are a few dry pockets, soy production occurs across nearly 1,200 miles and there are always a few areas in need of rain. So far, the 2019/20 S American weather profile looks favourable into December and trend yields are expected.

• US wheat values are rising on new tender demand from Algeria/Tunisia amid the prospect for a decline in US ratings amid last week’s Central US arctic cold. Chicago corn/soy values are sinking amid tepid US export demand against the worry about slowing Chinese demand (Phase One Trade Deal does not get completed). Chicago remains sensitive to US/China trade headlines. Midwest cash basis has been strong for months and continues to gain. December Chicago options go off the board on Friday.

• Chicago futures are mixed at midday, with grains weaker on meagre export sales and beans higher amid positive updates from US/Chinese trade negotiations. There is nothing concrete available with respect to the timing of the signing of a Phase One deal, but the bears will stay anxious as an announcement could come at any time. China through the week ending Nov 7 was an active buyer of US soybeans, a modest buyer of US pork, and a large sale of 10 million bu of US sorghum was made to unknown destinations.

• Weekly corn export sales totalled 23 million bu, vs. 19 million the prior week; wheat sales totalled 9 million bu, vs. 13 million the prior week and the lowest since mid-June; US soybean sales totalled 46 million bu, vs. 66 million the prior week. US corn sales need to average 33 million bu per week to meet the USDA’s forecast, which still appears to be 50-75 million bu too high.

• For their respective marketing years to date, the US has sold 491 million bu of corn, down 47% from last year; 558 million bu of wheat, up 7% on last year; and 818 million bu of soybeans, which is now up 2% on the prior year as of early November. Ship lineup data also suggests that weekly soybean export inspections will be large on Monday.

• NOPA-member crush in October totalled a much higher than expected 175 million bu, vs. 172 million a year ago. Sep-Oct NOPA crush sits at 328 million bu, down 2% from a year ago. The USDA projects annual 2019/20 soy crush to rise a modest 0.6%. Today’s data will prevent further declines in projected crush in coming WASDE releases.

• US soy oil stocks in Oct totalled 1.423 billion lbs, down a modest 20 million from Sep and down 80 million from Oct of 2018. Global vegetable oil stocks have tightened amid reduced rapeseed production in Europe and improved palm oil export demand in Oct. The US soy oil market has corrected on profit taking and concern over future biodiesel production. Yet, veg oils will be supported on breaks longer term.

• Today’s Commitment of Traders report is expected to show that managed funds were net short 120,000 contracts of corn on Tuesday, vs. 105,000 the prior week. Funds were short an estimated 5,000 contracts of Chicago wheat, vs. 700 the prior week, and are estimated to have been long a net 48,000 contracts of soybeans, down 10,000 contracts on the week.

• The midday GFS weather forecast is unchanged from the morning run. A10-day period of dryness is projected across the southern half of Brazil’s Soy Belt, while needed rains expand into fringe northern producing regions. A shift to much wetter conditions develops in Argentina beyond the early part of next week. Regional precipitation accumulation of 1-3″ will impact the some 80% of Argentina’s Ag Belt, including the driest areas of Cordoba and Buenos Aires. These two provinces combine for 50% of Argentine corn production. Short-term dryness concerns in Argentina will be in retreat. A more regular pattern of rain will be needed in Southern Brazil by early December.

• It is clear the markets need to see Phase One signed before adding substantial premium. Otherwise, S American weather will be priority number one for fundamental direction.

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Weekend summary 15 November 2019

• Chicago futures at midday are mixed but very close to unchanged in subdued volume. Corn has found modest buying/short covering as US ethanol stocks tighten further, suggesting there is a need to boost production longer term. General market activity is lacking amid no new US/Chinese trade news and as export sales on Friday will again confirm lackluster demand for US grains.

• FAS reported that China this morning purchased another 129,000 mt of US soybeans for 2019/20 (likely Dec-Jan) delivery. This morning’s announcement was largely expected following talk of recent buying from Chinese state-owned firms. Exporters this week have sold 235,000 mt of beans to China/unknown destinations. Key will be whether China opts to secure US beans for delivery beyond early February amid cheaper Brazilian fob offers.

• It is expected that FAS’s weekly sales report on Friday include 450-550,000 mt of corn, 300-450,000 mt of wheat and 1.2-1.5 million mt of soybeans.

• US ethanol production through the week ending Nov 8 totalled 303 million gallons, vs. 298 million the prior week but vs. 314 million gallons in early November a year ago. Production is rising seasonally but supply sourcing difficulties prevail. A much-improved pace is needed during the winter months to validate the USDA’s forecast. We note that cumulative Sep-early Nov weekly ethanol production is down 5% from last year. USDA projects ethanol’s corn demand draw to be unchanged from 2018/19.

• However, US ethanol stocks fell 38 million gallons to 881 million, down 11% on last year and the lowest since Sep of 2017. Margins are profitable and will stay as such amid elevated ethanol prices.

• Details of Egypt’s wheat tender are not yet available, but a larger share is likely to be given to Black Sea origin following sizeable tonnage of Russian offered competitively with French origin.

• The Buenos Aires Grain Exchange has lowered its Argentine wheat production estimate to 18.5 million mt, vs.18.8 previously and vs. the USDA’s 20 million mt forecast. Argentina’s wheat surplus is decreasing, but enlarged carry-in stocks will keep 2019/20 exports at/near record large. Argentine wheat exports peak seasonally in the Dec-Feb period.

• The midday GFS weather forecast is wetter in Argentina but drier across the Southern third of Brazil’s Ag Belt. The S American jet stream will move a bit northward over the next 8-10 days. This will push needed rainfall into the drier areas of Cordoba and Buenos Aires but will also act to trigger a lasting period of dryness in Southern Brazil. Extended range guidance allows normal precipitation to return to Southern Brazil beginning Nov 24, but close attention will be paid to S Brazil’s forecast in the days ahead. Recall building drought is difficult at tropical latitudes. But it is Southern Brazil where major crop problems have occurred in the past.

• Global cash markets continue to indicate adequate/abundant near-term supplies. The longer-term trend is steady/bearish until/unless Mother Nature says otherwise in S America this winter.

• Ag markets remain weak at midday, with Chicago wheat futures down 8-9 cents. Tuesday’s rally in US wheat markets has found ample selling amid weak EU wheat futures and amid a broadly flat global wheat cash market. Overnight rainfall in Central Argentina has limited new buying in row crops. Other news was tough to find this morning.

• There are reports that Chinese state-owned companies have been securing modest tonnages of US beans this week for Dec-Jan arrival. FAS this morning confirmed that exporters sold 106,000 mt of beans to unknown destinations for 2019/20 delivery. US cash beans are competitive with the last of S American offers when tariffs are waived. Yet, there is also talk of soybean supply congestion at ports, with some US vessels waiting as long as 30 days to unload.

• China has been boosting reserve stocks following depleted stocks during the throes of US-China trade war. Other meaningful demand is lacking as uncertainty persists over future tariff easing. Recall the US has planned to implement 15% tariffs on $160 billion of Chinese goods.

• The midday Central US forecast is wetter beyond Nov 22. Two systems of note are projected to sweep across the E Plains and Midwest Nov 23-27, with cumulative totals (mostly rain) pegged at 0.50-1.50″ across IA, MN, WI and IL, where corn harvests ranges from just 30-70% complete. Confidence in this wetter pattern is low, but whether the EU model follows this afternoon will be monitored. Wheat producers across the W Plains also indicate that winter wheat conditions there have been weakening amid dryness and bitter cold temperatures. Much of the HRW Belt stays dry into late November.

• The wheat market will also be keen to know the extent of winter wheat acreage loss. RMA wheat insurance enrollment data is available on a weekly basis, but won’t correlate with changes in seeding until mid/late December. As of Nov 11, there are 2.4 million acres enrolled, vs. 2.9 million a year ago.

• Australian drought looks to persist into the end of 2019. Ongoing dryness there is now affecting sorghum planting and emergence. The goals of Australian grain markets nearby is to assure domestic supplies are adequate by slowing/halting export potential.

• The midday GFS weather forecast has shifted heavy Argentine rainfall a bit southward. Soaking totals are now projected to favour southern Cordoba and the whole of Buenos Aires. Heavy cumulative totals are still offered to a majority of Argentina’s primary Corn Belt, but key in the days ahead is whether the EU and GFS models come to agreement. The EU model this week has kept Argentine rainfall capped at 0.25-0.75″. The GFS projects totals upwards of 2-3″. Rain is needed there ahead of early corn pollination in December.

• Brazilian crop areas will see a steady stream of near-daily showers, with cumulative rainfall into Nov 28 pegged at a rather normal 1-2″ in the south and 2-6″ in the north. The S American outlook remains non-threatening.

• It remains that ag markets lack input. It is tough to be overly bearish until US-Chinese trade details are known. But the remainder of the week will feature ongoing slow US ethanol production data and a lack of US grain export improvement.

• 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.