Morning Comments; Thursday, December 5th, 2019

A large amount of interest will be placed on the weekly export data this morning, particularly on corn. US corn values are now competitive with the global market and we should start to see demand increase if it’s going to. Brazil is starting to remove itself from the global corn market which should further elevate demand for US offerings. A firmer gulf basis indicates we have seen some demand build. The unknown with this is how much corn has already been satisfied from other sources, and how much is left for the US to cover. Trade will also monitor soybean sales to see if China is still a buyer. We have not seen much for flash sales recently, but that does not mean business has not been done. Seasonally the window is starting to close on US sales to China though, as interest will soon be on South America as harvest gets underway. The question is how much coverage is in place and if it will bridge the gap between the two suppliers. Weekly sales numbers will be affected by the Thanksgiving holiday though, which may lower totals. Aside from exports we will again see interest on global trade developments, with China taking center stage. The weather front is mixed, as conditions are improving in South America, but it looks like a small precipitation event is going to move through the upper Corn Belt states this weekend. This may further delay harvest and possibly cause additional crop loss.

Highlights

* Stats Canada report Friday; WASDE next Tuesday

* Fresh news again thins

* New Argentine government next week

* Slight increase in country movement

* Losses in US dollar affect exports

* Chinese trade talks “going well”

* Money flow from commodities to financials

* MFP payments may have been over-valued

Corn

* Seasonally a low comes in early December

* US has good window for exports through May

* US corn competitive in global market

* Ethanol production up for 10th week

* Ethanol stocks build

Soybeans

* China ramps up soy imports

* Brazil crop could reach 128 mmt

* Favorable Brazil weather developing

* Lack of Chinese trade confirmation

* Global oilseed market rallies

Wheat

* Stats Canada report on Friday

* Buyers pass on US wheat

* Australian harvest underway

* Russia to feed corn over wheat

* Canada wheat crop est at 32.6 mmt

Livestock

* Chinese pork costs hurt consumers

* China may release frozen pork supplies

* US hogs at 2-week high

* Wholesale values weaker

* Waiting for trade deal clarification

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