• HEADLINES: Grain rally fails; Fresh US export news absent.

• Chicago ag markets are mostly lower at midday as corn and wheat’s attempt to crawl back to unchanged has been met with ample selling interest amid morning strength in the US$. Harvest activity resumes across the Eastern Midwest this weekend, and following decent movement of corn this week, elevators are less anxious to build stocks. Chicago soybeans continue to drift lower, with Jan targeting strong chart-based support at $11.95-12.00. Key heading into the weekend is whether speculators opt to buy corn/wheat weakness at the close.

• FAS failed to announce any new export sales this morning, Chinese state-owned firms quietly/slowly adding to US soy purchases. World wheat tender news is also absent following Jordan’s purchase earlier in the week. Pakistan made no purchase from its tender. There is just a general lack of news, which will allowed for modest long liquidation across US and global ag markets.

• Soybean planting in Mato Grosso this week is likely to reach 92-94% complete, vs. 83% last year and vs. 92% in 2019. Soybeans from Central Brazil will begin to make their way towards ports in late Jan/early Feb, which places a much heavier burden on the pace of US soy export sales between now and late December. The market is aware that as of today, beans are offered from Southern Brazil for Feb shipment $9 per ton below the US Gulf. We have previouslyreported that backlogs at the Panama Canal are the latest logistical issue working against US soy exports.

• However, global crude futures have mounted a comeback, with spot WTI up $2.50 per barrel at midday. Spot RBOB gasoline has found buying interest at early October’s low ($2.30 per gallon). Ethanol economics remain highly supportive of record/near record production in the weeks ahead. The Dow is up 240 points. Energy markets moving forward look to be a battle of unchanged OPEC production against slowly rising US output. It is clear, for now, crude below $80 is cheap while rallies struggle to exceed $85 amid uncertainty over economic growth and the spread of Covid during the winter months.

• The Aussie forecast at midday is wetter in New South Wales, with the GFS now in much better agreement with its Eu counterpart. Next week’s rainfall of 1-3” by itself will not threaten milling wheat quality in E Australia, but the odds of additional excessive precipitation in late November remain elevated. Crop quality loss in Australia would be a big deal for wheat and canola markets.

• The midday GFS weather forecast is wetter in Southern Argentine crop areas, with 1-2” offered to key areas of La Pampa, southern Cordoba and Buenos Aires Nov 14-15. It is important that this rain falls, but model consistency in recent days has boosted confidence in its arrival. Normal tropical showers continue in Mato Grosso do Sul, Mato Grosso and Goias, which account for 40% of Brazilian soy production.

• We do note that closer attention must be paid to weather in far southern Brazil, including major producing state Parana. Limited precipitation will impact the southern third of Brazil beyond the weekend. Soil moisture there is adequate for now, but the return of widespread heavy rain will be needed by late month.

• Chicago soybeans are nearing oversold territory. Jan soy is expected to hold major chart-based support at $11.95-12.00. Additionally, we estimate that managed funds have established a modest net short position in soybeans. It is the wrong time of year to be overly bearish in our view. Recent price action has dialled in corn/soy yield hikes in next Tuesday’s USDA report.

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