Morning Commentary

Dec corn down ¾ at $3.6675

Jan beans down 2 at $8.8675

The DOW is up

USD is weaker

Crude oil up $1.19 at $57.65

Good morning,

Corn prices remain steady and stuck in a fairly narrow range. Bulls are hoping some type of trade resolution with the Chinese will help pull corn prices higher. Bulls are also pointing to more evidence and talk of total U.S. corn production eventually being trimmed a bit further. Late weather problems and harvest delays are creating headwinds for producers in several locations.  Bears are pointing to increasing supplies and competition coming from South America and the Black Sea region. This is prompting some bears to reduce their current export estimates. This mornings weekly export sales data will be heavily monitored as the trade wants to learn more about forward looking demand. The past few weeks have been somewhat disappointing. The trade is also catching some headwind as more ethanol plants reduce run rates and close a few operations. There were headlines circulating yesterday that Green Plains closed their Virginia plant and reduced run rates at a few other facilities. The short term outlook is neutral while momentum remains negative.  Consecutive closes outside 356.25-374.5 would provide fresh targets.  Long, system types are risking 365.75.

Soybean bulls are happy to see more headlines of U.S. and Chinese leaders talking and discussing potential trade resolutions. Bulls are also happy to see a record October NOPA crush estimate. The crush was reported at 172.346 million bushels, which was higher than most in the trader were thinking. It was also significantly higher than the 160.8 million reported in September and the 164.2 million reported last October. Soyoil stocks fell from 1.53 billion last month to 1.50 billion pounds this month, which was actually a little lower than the trade was anticipating, this was also the sixth straight month of lower numbers, but still significantly higher than the 1.224 billion reported in October of last year. Bears are pointing to good weather in South America and their sizable jump in production compared to the past year. The short term outlook is positive.  Consecutive closes over 893 is constructive.  A close under 865.75 is needed to void the outlook.  Long, system types are risking 886.  In tonight’s commitment of traders report, funds are expected to be short 116,000 beans on a futures and options basis versus 103,000 the week prior.  30 day ATM bean vol traded to the highest level since Sep 24th

Green Plains Inc, the nation’s fourth-largest ethanol producer, has shuttered a Virginia production plant and cut output at several other facilities as it tries to navigate a supply glut that has pummeled biofuel profits. Green Plains announced on Thursday that it was closing a plant in the town of Hopewell that had capacity to produce 60 million gallons annually. Thirty-one jobs will be cut, it said in a news release. (Source: Reuters)

A resolution to the ongoing trade war between China and the US and a strengthening Brazilian real versus the dollar is likely to revive tension between farmers, the trucking union and the government in Brazil over the cost of transporting goods, an industry conference heard Thursday. Soaring premiums for Brazilian soybeans, which have risen from 63 cents per bushel over futures to 265 cents per bushel since May, and a weaker real versus the dollar had shielded farmers from higher transportation costs imposed by the government this year. (Source: Agricensus)


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