Closing Comments; Monday, November 25th, 2019

After a firm overnight session, the market was mixed for much of the day trade. The grains were the leaders, with the most support coming from wheat. Global production concerns and building demand supported the wheat complex, as did concerns over what US weather could be doing for the crops this week. This goes for both corn and wheat. Soybean held to the negative side much of the day as technical pressure capped the market, as did news China is again taking most of their needs from South America.

It appears as though we are finally seeing some trade progress between the US and China worth noting. Chinese officials have stated they are willing to step up the protection of intellectual properties which has been a major stumbling block in negotiations. Another one that needs to be worked through is tariff rates, both on existing products and those set to go into effect in December. Both sides claim they are making progress and expect the Phase 1 deal to be finalized.

China has upped its imports of commodities recently, which opens the door for additional US demand. In the month of October China imported 12.8% more corn than in October 2018. Soybean imports for the month were up 10.7% on the year, and wheat imports were up a large 24.5%. It is believed that much of this is going into government storage, which makes them exempt from tariffs. The weaker values on global commodities are also a factor for the higher imports.

South American planting is moving ahead, with Brazil reporting 79% of their soybeans in the ground. This is right at the five-year average, but slightly behind the pace that was seen last year. Given this slightly slower pace, some doubt is taking place on Safrinha acres. There are thoughts we could see a smaller second corn crop given these delays, but farmers in Brazil are claiming they will seed corn past their normal window is needed. The concern this brings is that the rainy season in Brazil can end before the crop is fully mature, cutting final yields.

South American weather outlooks are giving trade mixed signals. Widespread rains are currently moving through South America, but total amounts received will vary. There are models that indicate much of Brazil and Paraguay will receive light amounts and will need more precipitation as the calendar turns to December. Argentina is also in need of more rainfall as drought conditions continue in that country as well. These conditions could end up having more of an impact on South American production than acres if they persist.

Export inspections for the week ending November 21st were more favorable for soybeans than the grains. Soybean inspections for the week totaled 71.38 million bu, over twice the needed volume per week. This high number was tempered by news China was again sourcing soybeans from Brazil, with last week’s bookings reaching a reported 30 vessels. Corn inspections were just under the volume needed at 23.8 million bu. Wheat inspections were also light at just 15.46 million bu for the week.

Last Friday’s cattle on feed report contained mixed data. On November 1st there were 11.831 million head in US feedlots, a 1% increase on the year. Placements for the month were less than expected at 2.48 million head, but this was still 10% more than last October. Marketings were also light at just 99% of October 2018.

The cold storage report was also released for October and was mixed for pork and beef. US pork stocks at the end of October totaled 614.5 million pounds. This is not only a 7% build from a year ago, but a record monthly total, and 35% above the ten-year average. Beef in cold storage in October totaled 466.219 million pounds, which was down 9.5% from last year. This is also the least amount of beef in storage in the past five years.

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


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