Morning Comments; Monday, November 25th, 2019

Last week’s trade finished mixed as technical indicators drove futures rather than fundamentals. Fundamentally, very little changed in the market last week, but that may change this week. We will see month end positioning take place this week, which will likely be more of a factor for the grains as corn and wheat both have contracts go into delivery. Trade volume will also be quite thin this week due to the Thanksgiving Holiday. Trade will be open normal hours on Wednesday, closed Thursday, and reopen Friday morning at 8:30 CT. Friday’s trade will also be short, with a closing time of 12:05 CT. While this can reduce trade volume, it can create volatile trade. Trade will also continue to monitor developments between the US and others on exports this week, including China and the USMCA agreements. We will also continue to monitor the US harvest on corn, and what the quality of the crop is. More reports are being made of high moisture and low test weights on later harvested bushels, and even that some bins have already taken on moisture after being dried. Not only could this generate discounts on low quality bushels but create premiums for high quality inventory.

Highlights

* Fresh news remains sparse

* Technical trade dominates markets

* USMCA unlikely this year

* Doubts continue on US/China trade truce

* Short trade this week

* Markets closed Thursday, close early Friday

* FND on Dec contracts is Friday

* Ukraine grain exports +36% from last year

Corn

* Global demand underestimated

* 76% of US corn sales are to Central America

* Improved ethanol margins

* Quality a concern on US crop

* Later planting in Brazil

Soybeans

* China accounts for 40% of US sales

* Larger Argentine plantings likely

* US needs to remain price competitive

* SAM weather is questionable

* Record export loadings take place

Wheat

* World plantings to increase 1%

* Buyers sourcing needs from Argentina

* May see higher Argentine production

* Premiums paid for high quality inventory

* Technical buying surfaces

Livestock

* Hog numbers rising in China

* Nov COF at 101%; 11.831 million head on feed

* Oct placements 110%, Marketings 99%

* Pork in cold storage at 614,500 mil pounds

* Beef in cold storage at 466,219 mil pounds

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