November 26 Afternoon Comments

Soybeans, soymeal, soyoil, corn and wheat all traded lower. US stocks were higher. US Dollar was lower. Crude and gold traded higher.

SOYBEANS

Soybean continued to trade lower on increase volume. Funds appear to be adding to net short positions on a lack of concrete news on US and China trade deal. Some fear a trade below 8.91 SF could signal additional weakness. Big news today is that Brazil Economic minister visiting US stated that Brazil will not support the Real. Today, Real dropped to 4.26. This raised Brazil soybean farm price to 44-48 reals/bag and best in 5 years. There are also rumors that Argentina may soon increase export taxes. Argentina Peso dropped 2 pct to 60 pesos vs US Dollar. Most of Brazil should see normal rains over the next 10 days 79 pct of the Brazil soybean crop has been planted. Drop in currency and rains could help increase Brazil soybean acres. Malaysian palmoil prices have dropped on concern recent rally in prices could slow export demand. China Oct vegoil imports were a record 1.3 mmt Jan-Oct imports are 10.0 mmt vs 7.1 last year.

CORN

Corn futures traded lower. CZ gave up Mondays gains on continued concern about slow export demand and talk of higher World 2020 supplies. Ukraine and Argentina corn export prices are a discount to US. In Feb, Brazil corn export prices are also below US. This leaves little opportunity for US to see increase in export demand. Today Brazil said they will not support their currency. This increased the price to the Brazil farmer and could increase final acres. The planting of the second Brazil corn crop has been delayed. There was even some talk that before harvest Brazil may have to import a small amount of corn. 84 pct of the US corn crop is harvested. Most of the acres unharvested is in ND, WI and MI. This week wet Midwest weather could slow final harvest. Supply bulls hope that USDA will drop the final crop size in January. Demand bears though could see futures drop lower between now and then. China Oct meat imports were a record. Jan-Oct imports were near 3.7 mmt vs 2.5 last year.

WHEAT

Chicago Dec wheat futures was unchanged and near 5.30. WZ-WH spread narrowed going into first notices. Most look for zero deliveries on WZ. Open interest has collapsed during the rally in futures. USDA kept US winter wheat crop ratings unchanged at 52 pct good/ex vs 55 last year. USDA rated KS crop 44 pct good/ex. MO is rated 41 pct. NE is rated 74. WA is rated 71. Some feel KS would benefit from a good rain. WH has bounced back to near 5.30 before first notice and month end. WH is trading above all key moving averages. Futures are becoming overbought and will need either a weather scare or new export demand to trade higher.

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2019-11-26T20:16:40+00:00 November 26th, 2019|