- It has been a mixed morning with wheat fund liquidation ongoing while corn and beans hold steady. Crude has extended its overnight recovery, with spot WTI up $1.10 and RBOB gasoline up $.03. Ethanol future are flat. Crude’s plunge did on the margin weight on emerging market currencies, but only modestly. Currencies in Brazil, Argentina, Russia and Ukraine are up today.
- Exporters this morning sold 148,000 mt of soybeans to unknown destinations for 2018/19 delivery. Exporters also sold 212,000 mt of corn to Mexico. Taiwan also secured one cargo of optional origin corn to be sourced from either the US or Brazil.
- The debate in the soy complex now centres on the strength of non-Chinese demand growth moving forward. The USDA of course has given only a fraction of China’s imports to the US. The US is expected to supply up to 85% of non- Chinese world trade. Whether this share of non-Chinese trade grows needs monitoring following the USDA’s massive cut to US soy export demand last week. Another downward revision is not anticipated. Rhetoric surrounding US-Chinese dialogue remains mostly positive. The issue heading into late Nov’s G20 meeting is now infighting between top White House trade officials. Ultimately it is President Trump that decides if the terms of any proposal are acceptable.
- The midday GFS weather forecast is much wetter in Ukraine and Southern Russia in the 8-15 day period. Heavy snow worth 3-12” is forecast through the period, which would imply a moisture equivalent of 0.50-2.00”. We do mention that neither the EU nor Canadian models include this pattern change, but no doubt a blanket of snow would be welcomed there. Contacts suggest wheat conditions are rather variable in Russia. There is a general consensus that much more moisture is needed prior to spring.
- NOPA member crush data on Thursday is expected at 170-171 million bu. This will again be a record for the month and up 6-7 million from last year.
- The midday S American GFS weather forecast is slightly wetter in Argentina in the 6-15 day period. Excessive totals are unlikely, but a series of light/moderate events Nov 22-25 will trigger accumulation of 1-2” across Buenos Aires, Santa Fe and Entre Rios, areas that have been inundated with rain since late last week. A more lasting period of dryness is desired. Favourable weather persists in Brazil. Drier conditions favor Southern Brazil, where it is needed. Daily showers persist across Central and Northern areas along with normal/below normal temperatures.
- Managed funds will be now likely be square in KC wheat following today’s break, while the Russian fob market cannot afford to go down amid rising interior prices.