Morning Comments; Friday, December 6th, 2019

Trade has been volatile this week with futures all seeing gains and losses. There is a void of fresh news to work with which is the primary reason for the back and forth trade. Soybeans have started to show some strength as short covering has developed in the complex. Early in the week soybeans fell into oversold territory but have recovered and are now leaning towards neutral. Soybean futures keep getting whip-sawed by trade news and the on again, off again relations with China. Both sides claim a deal is close at hand, but at the same time, point out how they are standing firm on their own demands and will not negotiate. This gives the indication that the trade war is not as close to being settled as thought. The grains have been pressured in the past few sessions as export concerns linger. Wheat is suffering from concerns the contract rallied too far and now buyers are not interested in our offerings. This comes after importers have passed on us as a supplier. Corn is trying to rally on demand prospects, but the longer it takes this to develop, the less optimism there is. We are also seeing positioning develop ahead of next week’s WASDE report. While only demand will be adjusted on the domestic side, we will see alterations to all global numbers. This could easily set the market up for a surprise. Stats Canada numbers will be released today, and these will likely have an impact on wheat values.

Highlights

* Stats Canada report today

* WASDE next Tuesday

* Presidential impeachment developments

* China stands firm on tariffs being removed

* US trade deficit lowest in a year

* Global export/import pattern shifts

* Ethanol exports half of year ago

* Sparse fresh news

Corn

* Technical resistance limits gains

* Buyers use quality to negotiate price

* Test weight remains a concern

* Brazil corn shortage possible

* October exports -59.3% from year ago

Soybeans

* Buyers show up for soybeans

* China imports record soy volume in Nov

* US weekly sales to China lowest in 6 weeks

* US competitive with Brazil through March

* October exports +9% last year

Wheat

* Analysts raise Russian crop est

* Lower estimate on Australian crop

* Australian crop at 11 year low

* Dry weather impacting Argentina

* Global wheat quality an issue

Livestock

* North American beef supply steady in 2020

* Asian beef demand to rise

* Brazil to expand beef production 22%

* US beef export -46% last week

* US pork exports +37% on the year

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