- Combined world barley and sorghum end stocks in 2018/19 are projected at a record low 22 million mt. More attention than ever will be paid to rainfall and soil moisture in Eastern Australia this winter, as Australia quietly is the world’s second largest exporter of sorghum. A big crop is needed to fill Aussie’s own domestic feed demand, much less export 1.0-1.5 million mt.
- Chicago futures are mostly higher are midday as corn, soybeans and wheat values climb. The summer row crops have been leading the advance while KC wheat is being pulled along. KC/Chi spread unwinding should be nearing an end with the Saudi wheat tender on Friday being very important for the US/world marketplace early next week. And GASC should be seeing this modest downdraft in world wheat prices as another forward buying opportunity. January soybeans are getting close to key resistance at $9.00 on short covering ahead of the Trump/Xi meeting in Buenos Aries while corn is following.
- Chicago brokers estimate that funds have bought 3,400 contracts of soybeans, 4,900 contracts of corn, and 1,300 contracts of Chicago wheat. In soy products, funds have bought 2,900 contracts of soymeal and 3,100 contracts of soyoil.
- Saudi Arabia issued a tender to secure 475,000 mt of world hard wheat (12.5% protein) for January to March. Russian wheat does not work on specs, so it is down to German, US or Argentina to fill the demand. Most in the EU argue that only a few cargoes of hi pro German wheat are available, not enough following last summer drought. As such, the Americas have a good chance of filling much of the tender demand. The big question is whether Argentine exporters will be willing to sell 12.5% protein wheat to Saudi following the flooding rains of last weekend. Sprout damage is already being reported which will turn an unknown portion of their milling wheat into feed. Argy wheat crop estimates are also in decline to 18-18.5 million mt from 19-19.5 million. US HRW wheat has a good chance to fill a portion of the tender. And, remember that of the 14 million mt of Argentine wheat exports, Brazil plans take at least half at 7.0-7.5 million during 2018/19.
- WASDE head, Seth Meyers, at a Geneva Switzerland grain conference indicated that their 2018/19 US and world soybean export estimates included no new US soybean sales to China and that the US would fill 84-85% of non-Chinese world soybean trade demand. This means that any further cut to US soybean exports have to come from non-Chinese buyers.
- NOPA soybean crush in October totalled 172.4 million bu, a bit higher than trade guesses and a new all-time record, barely edging out March’s 171.9. Soy oil stocks fell to 1,503 million, vs. 1,531 last month and 1,224 million a year ago. Soy oil disappearance is strong.
- The midday GFS S American weather forecast is wetter across Central and Northern Brazil in the 10 day forecast and slightly drier in Northern Argentina. The rains for Central Brazil are adding up and agronomists are starting to worry about disease heading into the vegetative growth and early bloom period. Excessive totals of 6-12” are likely in the next 10 days. So far the weather across most of Brazil has been favourable, but the forecast needs to be watched. A series of ligh/moderate events Nov 22-25 will trigger accumulation of 1-2” across Buenos Aires, Santa Fe and Entre Rios in Argentina. Too much rain in N and C Brazil and Argentina remains the crop worry of the moment.
- Russian wheat exporters are reluctant to sell beyond December amid the fear of an export ban or restriction. January soybeans have resistance above $9.00 and December corn above $3.80.