Morning Comments

Dec corn +4 at 4.115

Jan beans +6 ¾ at 11.1725

The DOW is UP


Crude oil +.46 at 40.75


Good morning,

Overnight grain markets traded higher, led by beans and corn ahead of an anticipated friendly crop report.

The USDA crop report is at 11 cst. The avg. trade estimates for the crop report show bean yields slipping to 51.6 bpa for a crop of 4.251 bb vs.51.9 bpa and 4.268 bb in October. Analysts are projecting a bump in exports from 2.2 bb with the ending stocks forecast at 235 mb, down from 290 mb in October. On the world stage, ending stocks are est. at 87.44 mmt from 88.70 in October. In general, the trend of tightening balance sheets is expected to continue and with a stocks to use ratio on beans at about 5%, the function of the market is to ration demand through higher prices. Beans appear to be getting comfortable with $11 but our price count target remains closer to $12. Complete report ranges and estimates are posted below.

The USDA reported a new sale of 130 tmt of corn to S Korea for 20/21.

US soybean harvest progress advanced 5 to 92% complete compared to the 5 year avg. of 90% but behind the trade expectation of 94%. Kentucky, Arkansas, North Carolina, and Tennessee are the few states that are lagging. Corn harvest moved up 9 to 91% complete. This time last year, 62% of the crop had been harvested, and the average for this date is 80%. The only state lagging average is Ohio, which is 64% complete (12% behind average).

Brazil saw some welcomed rains fall in Mato Grosso, Mato Grosso do Sul, Parana, and parts of Goias but remained mostly dry elsewhere. Argentina rains were limited to the South. The forecast shows better rains evolving for Brazil over the next couple of weeks but the far South of Brazil and much of Argentina appear to miss out.

Overnight, the corn market was mostly higher, finishing 3-4 cents better by the morning pause. It’s report day, and it is arguably a crop report that has more questions than answers when it comes to content. At this point, the November report is usually an afterthought, but given all the late issues surrounding this year’s crop, remains rather relevant. Most analysts expect another downtick on corn yields; average guess is for 177.7 bpa versus 178.4 in October. This (along with higher demand, apparently) is expected to trim U.S. carryout forecasts by roughly 150 million bushels to 2.033 billion. Fairly straightforward, as opposed to the world data, which is ‘in flux’ from our chair. The number one question is China; the USDA published new attache data raising their corn imports (and ending stocks??), but it was only published last week – perhaps not enough time to make it into the Nov report? Ukraine is likely due for a modest trimming of output and exports. It is probably too early for the USDA to make adjustments to South American corn? Brazil’s CONAB was out this morning, raising soy production estimates but trimming corn very slightly (104.9 mmt vs 105.2 prior est and 102.5 last year). There was a little ‘other’ news around; South Korea’s KOCOPIA was the latest user there to bite for corn, taking 60k optional origin. Korea was in for 130,000 U.S. corn at 8 AM? Note that tomorrow is a gov’t holiday (Veterans Day); this will push the weekly EIA report to Thursday and the weekly export sales data to Friday.


Darren, David, and Elizabeth

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