- Chicago pushes higher on big fund demand in corn; Political polls being discussed; Sizeable rain for N Brazil.
- Chicago corn, soybean and wheat futures are higher at midday. Buying emerged at the morning reopening and it persisted into the midday hour. December corn futures powered up to $4.13-4.16 chart resistance and November soybean futures to $9.95-10.00. The morning rally has been paced by soyoil with December futures pushing up to $0.44-0.45 resistance. And finally, December Chicago wheat futures held support at $5.65 and rallied. Last week it was “student body” right (Trump) and this week it’s “student body” left (Harris).
- Grain futures declined last week as it appeared that former US President Trump was surging in the polls. However, the weekend and early polls showed that Harris has regained lost polling ground. We would note that political polls are often unreliable, but their importance to Chicago grain values should not be understated in terms of ag trade or green fuels. The subtle shift in the polls back to Harris has funds buying soyoil on the hope that she maintains a strong US green fuel subsidy program. The coming US election looms large in the minds of traders, and we are sure that a few additional back and forth in the polling results looms.
- Chicago brokers estimate that the managed money has bought 4,100 contracts of Chicago wheat, 12,400 contracts of corn, and 6,700 contracts of soybeans. Managed money has bought 5,300 contracts of soyoil and sold 1,600 contracts of soymeal.
- FAS/USDA reported the sale of 359,500 mt of US corn to Mexico for the 2024/25 crop year.
- We would mention that we did not envision the Chicago November/January soybean spread pushing much above $0.07 or December/March corn spread much above $0.11/bu on record large US corn and soybean stocks as of November 1. Cash basis bids are firming on US farmer cash sales reluctance as he pushes ahead with the 2024 harvest. However, on farm storage is quickly filling and the last 10% of the US soybean and 20% of the corn harvest may be sold on basis contracts or pushed across the scales. One thing that US farmers are waiting for is the calculation of revenue insurance price off October Chicago corn and soybean futures. Depending on yield, farmers may or may not being seeing a payment, and they are less willing to sell grain until they know.
- The IMF raised the 2024 US economic growth forecast to 2.8% on better consumer demand and a brighter jobs outlook with 2025 at 2.2%. However, the IMF cut China’s 2024 economic growth forecast to 4.8% with 2025 forecast at 4.5%. In other words, China’s economic growth will continue to fade. 2025 Global economic growth is forecast at 3.2%, the same as 2024. However, trade and geopolitical risks are rising amid 2 wars and new protectionist trade policies
- A favourable mixture of rain/sunshine prevails across Brazil/Argentina for the next 10 days. Northern Brazil will see daily showers of 0.25-1.25” to restore soil moisture. EC Brazil is favoured with any heavier rainfall. Key growing regions of Mato Grosso received 1-4.00” of rainfall overnight helping to more fully replace lost subsoil. Brazilian high temperatures will range from the 80’s to the low 90’s. The Argentine forecast is also favourable with rain to return Wednesday with totals of 0.5-3.00” followed by 5-7 days of dry weather before new shower chances return. No extreme heat is forecast with highs in the 70’s to the upper 80’s.
- Yesterday, we suggested that a weekly high should be scored early today. It is doubtful that US corn/soy/wheat prices can sustain an uptrend amid favourable S American weather and a seasonal slowdown in China’s purchase program of corn/soybeans. China has yet to secure any world wheat with the midpoint of the crop year noted in November. US daily export sales are expected to slow for the remainder of the week, while Brazil is well behind in its corn sales pace. Corn has nearly retraced 50% of its recent decline while Dec/March corn and Nov/January soybean spreads near a seasonal high at 13.0 and 7.0 cents, respectively.