- Turnaround Tuesday has struck again! Chicago markets are higher at tonight’s close as US interior basis levels (corn in particular) rises. According to ADM’s CEO, Juan Luciano, farmers (he suspects) have sold some 30% of new crop corn as opposed 45% on average and soybeans 35% vs. 60% on average. Lack of farmer selling is supporting prices.
- Informa Economics, in advance of next week’s UASDA figures, raised US 2015 corn yield to 170.1 bushels/acre (previously 168.4) and output to 13.718 billion bu (previous 13.561). Soybean yield was also estimated higher at 47.9 bushels/acre (previous 47.2) with output at 3.952 billion bu (previous 3.878). The trade has likely priced in a boost in soybean yield, so Informa’s estimate should be viewed as neutral today, whilst their corn figures, if correct, are modestly bearish – adding 100-150 million bu to stocks aside from any export lags that might take place.
- Brazil saw record corn exports in October, 5.3 million mt vs. 3.5 in September and 2.6 million mt of soybeans vs. 3.7 in September. Whilst the corn shipment pace is not a surprise it is the suggestion that this sort of pace could continue into Dec/Jan that really is of significance, keep in mind commitments (sales made but not yet shipped) are up 70% year on year. The USDA’s projection is a mere 40% increase in annual Brazilian corn exports.
- NASS last night reported soybean harvest progress through Sunday at 92% complete vs. the five year average of 88%. Harvest was complete in MN and ND, with eight other states reported at 95% complete or above. After the close, FC Stone estimate a US soybean yield of 47.5 bushels/acre with a crop size of 3.919 billion bu, we hold to a longer term fundamental bearish outlook, with any post harvest rally to offer selling opportunities.
- US corn harvest as of Sunday reached 85% complete, on par with trade estimates and up six points from the five year average. Farmers will remain tightfisted into early 2016, which will support domestic basis but also maintain sizeable premiums in Gulf basis levels. The lack of competitive US offers will weigh on rallies to $3.90/bu plus basis December. FC Stone raised their corn production forecast 2 million bu to 13,543 million, with yield pegged at 168 bushels/acre.
- US winter wheat good/excellent ratings were put at 49%, vs. 47% a week ago and 59% last year. Substantial improvement (5-14%) are noted in AR, ID, KS and OK; declines are noted in TX and WA. National ratings should improve further next week amid mild temperatures and additional rainfall in E OK, E KS and the S Midwest. Recent weeks have proven that wheat is overvalued above $5.20, and better competes with other origins below $4.80.
