Morning Commentary

Dec corn down 1 ¼ at $3.635

Jan beans down ¼ at $8.4675

The DOW is up

USD is weaker

Crude oil up $.06 at $66.24

Good morning,

Corn prices remain in a narrow trading range. Bulls continue to talk about U.S. production estimates pulling back. The recent forecast for heavy snow in parts of the upper Midwest and delays out East are cause for some concern. Bulls also point to logistical restraints and problems in South America, especially if they are going to be forced to supply China with the majority of their soybeans. Bulls also point to a fairly significant reduction in Chinese and global corn stocks. Bears see the same shrinking of the global balance sheet but deem supply to be ample or adequate enough not to create a shortage. Bears are also banking on a big jump in South American production compared to last year. The short term outlook is slightly negative but momentum is turning up.  A close under 364.5 would signal a drop to 356.25.  Closing over 371.5 is needed to halt the declines.  System types are long; risking 361.75.  Spot corn futures are 8.5 cents higher going in to the last session of the month.

Soybean prices are steady this morning, but have fallen -60 cents from its mid-October highs. First Notice Day for the NOV18 contract is today, the contract goes off the board in two weeks. Many bears think we could ultimately retest the lows on the chart down at $8.12^2. Bulls continue to point towards weather worries and delays in the U.S. harvest. Several states in the upper-Midwest are now looking at 10 to 12 inches of snow in the forecast, while producers towards the East and in the Delta are battling wet conditions. There was talk yesterday, a cargo of soybeans that had been sold to China and ready to leave our port, was actually resold to Vietnam, further confirming China’s effort to avoid U.S. supply. There’s also no fresh or new news surrounding Chinese trade negotiations. It seems most inside the trade are now mentally preparing for the next round of tariffs and the trade conflict to deepen further before improving. There’s also the ongoing headwinds and uncertainty surrounding African Swine Fever and the Chinese government trying to ration demand by lowering protein requirements and importing more alternatives. The short term outlook is negative.  The market is oversold.  Sustained action under 856.75 signals a test of 840.25.  A close over 883.5 is needed to confirm an end to the pullback.  System types are short; risking around 859.25.  Spot bean futures are 12 cents lower going in to the last session of the month.

Bunge Ltd is finalizing agreements with activist investors D.E. Shaw and Co and Continental Grain Co to add four directors to its board and set up a committee to explore a sale, two sources familiar with the matter said on Tuesday. The agreement was first reported by the Wall Street Journal, which earlier this month said D.E. Shaw had raised its stake in the grain trader and was working with Continental Grain to make operational improvements at the company. Bunge shares were up 3.3 percent at $67.92 on Tuesday afternoon. (Source: Reuters)

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