Morning Comments; Friday, November 22nd, 2019

This week’s trade has focused as much on the technicals as it has the fundamentals. This is mainly from the fact that fundamentally, very little has changed in the market recently. The only real change is that we are starting to see demand build on corn. While this is supportive, the fact US corn sales are well behind a year ago we need to see this demand. As of right now, the sales we have seen this week may simply prevent ending stocks from being raised in the next set of USDA balance sheets. For soybeans, attention remains on whether we can get a trade deal signed with China in the near future. Chinese officials claim they are willing to host a Phase 1 signing in that country, but we continue to see hesitation on the terms of an agreement. The clock is ticking on a deal before the next set of tariffs goes into effect on December 15th. Trade is starting to monitor future sales on soybeans as the price spread favors Brazilian origination in 2020. Technically, December corn found support at the chart gap of $3.65 ¾ and has held above it. The same is true for January soybeans with the $9.01 mark. The question is if we can hold these as trade starts to prepare for next week’s holiday shortened sessions and month end.

Highlights

* IGC pegs world grain production at 2.162 billion mt

* IGC sees world grain demand at 2.188 billion mt

* More rains needed for South America

* Technical support holds on corn, tested on soybeans

* Trade deal uncertainty continues

* Dispute over Hong Kong growing

* Asian population to increase 250 million by 2030

* Dec options expire today

Corn

* IGC; worlds stocks tighten, still adequate

* Global production up on US corn crop

* Flash sales continue on corn

* Corn/Oat spread being noticed

* Corn moving from WCB to ECB

Soybeans

* US soybeans currently -33c/bu to Brazil

* January forward Brazil is cheaper than US

* Doubts over Chinese trade resolution

* Corn/Soy spread being monitored

* Crush margins remain firm

Wheat

* IGC; no change to Australian crop

* IGC predicts large wheat crop in EU

* Technical buying surfaces

* Corn/wheat spread widening

* Basis pushed for high-quality wheat

Livestock

* Nov 1st COF estimated at 101.4%

* Oct placements at 112.2%, marketings at 99.6%

* 2019 pork sales at 54,400 mt; Japan buys 21,500 mt

* 2020 pork sales at 36,400 mt; 34,300 mt to China

* 2019 beef sales 17,959 mt, 2020 at 3,247 mt

This commentary is the sole opinion of Karl Setzer, Senior Commodity Risk Analyst for AgriVisor, LLC. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to send an e-mail to ksetzer@agrivisor.com.




 

Market Commentary provided by:

Karl Setzer Grain Commentary