Morning Commentary

Dec corn up 2 ¼ at $3.84

Nov beans up ½ at $9.2225

The DOW is up

USD is weaker

Crude oil down $.21 at $57.02

Good morning,

Corn traders are clearly waiting on Friday’s next round of USDA data. In the interim, the market remains in a very narrow trading range. Most in the trade are thinking the USDA will trim its U.S. yield forecast. Bulls are hoping to see a yield reduction of -1 to -3 bushels per acre, taking the current estimate from 168.4 down to between 165.4 and 167.4. Bears are simply pointing to last month and the fact the USDA didn’t lower their yield forecast in the October report, a time when everyone was looking for a reduction. We are not expecting any type of big downward production adjustment by the USDA. At the same time, any reduction in yield could easily be offset by another reduction in export and ethanol demand. It’s just hard for us to get overly bullish heading into this report. Dec corn is down nearly 10 cents during November. The trend for December corn is neutral. Stable action above 398.25 is needed to restart a bull drive (420+/-). Closing under 381 alerts for a return to defensive trade and a test of key support below 370.

Soybean traders are taking a wait-and-see approach heading into the highly uncertain USDA report scheduled for release this Friday. Most in the trade are thinking the USDA might make a small reduction to its U.S. production forecast and in turn a slight reduction to U.S. ending stocks. The trade is also keeping an extremely close eye on South American weather and Chinese trade negotiations. The trend for January beans is neutral-positive. Stable action over 959.5 is needed to drive the next leg higher. Closing under 919 alerts for a return to corrective action.

Canada will resume shipments of pork and beef to China, ending a ban imposed in June, as the Asian nation strives to fill a protein gap left by the spread of African swine fever. Canadian authorities “will continue to work closely with beef and pork producers and processors in the coming days and weeks to ensure successful resumption of trade,” Canadian authorities said in a statement. China suspended Canadian meat imports on June 25 after authorities discovered a certificate on a pork cargo had been forged. Canada shipped about $514 million in pork to China last year. The resumption of meat shipments to China will also likely mean less of the meat going to the U.S., so it’s overall good news for farmers on both sides of the border. (Source: Bloomberg) 


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