Morning Commentary

March corn up 1 at $3.8225

Jan beans up 5 ½ at $8.765

The DOW is up

USD is weaker

Crude oil up $.99 at $57.09

Good morning,

Corn bulls continue to point towards nine million U.S. corn acres that are still thought to be unharvested. Most eyes remain on the acres in North Dakota, Michigan, and Wisconsin. But there are also still many unharvested acres in Illinois, Indiana, Iowa, Minnesota, and Ohio. Unfortunately, we still have to wait until January 10th before we get an updated USDA production estimate. The trend for March corn is negative. Consistent trade below 382.5 on a closing basis will position the market to trade 365.75. A close over 389.5 confirms additional corrective action. The trade count had the fund selling 1,500 corn Tuesday. Based on the trade count, funds are thought to be short 129,000 lots.

Soybean traders continue to debate Chinese negotiations. There’s obviously a large amount of political jockeying taking place and it’s next to impossible to differentiate fact from fiction. As time comes off the clock the market seems more concerned that U.S. exporters are losing their window-of-opportunity as early-planted South American soybeans will soon start being harvested and eventually available in the export space. Keep in mind, Brazil harvested about 117 MMTs of soybeans last year and the USDA is thinking more like 123 MMTs this year, with some private estimates being pushed higher. The trend for January beans is negative. Interesting to note that open interest in beans has risen over 158,000 lots since the end of October while prices have slid nearly 60 cents. The market’s inability to take out Monday’s low combined with the deeply oversold condition leaves the market vulnerable to a technical recovery. A close over 902.5 confirms a recovery phase. A close below 865 leaves the market in position to trade 843.5. The trade count had the fund buying just 500 beans Tuesday. Based on the trade count, funds are thought to be short 73,000 lots.

China’s state reserves bought 2,000 metric tons of cotton on Monday, its first purchase in five years, said the China Cotton Association on its website on Tuesday.  The cotton, all grown in major producing region Xinjiang, was sold at an average price of 13,259 yuan ($1,883.70) per metric ton. (Source: Reuters)

Italian pasta-makers have increasingly used U.S. and Canadian wheat for their spaghetti and macaroni. The trend is likely to continue after European growers planted less wheat and bad weather on the continent further weighed on production, foiling Italy’s efforts to protect its own farmers. Italian importers took advantage of U.S. and Canadian durum of “excellent quality” at “historically cheap values,” Niccolo d’Andria, vice president of the Rome-based grains group Associazione Nazionale Cerealisti, or Anacer, said in an email. A second round of imports may loom in April, he said. Exports of Canadian durum to Italy in the two months ended Sept. 30 almost tripled to 156,500 tons from a year earlier, according to the Canadian Grain Commission. Shipments from the U.S. in the nine months ended September more than doubled to 210,000 tons, the most since 2015, U.S. Department of Agriculture data show. (Source: Bloomberg)


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