Written Commentary
MORNING COMMENTS
Ag Fundamentals:
Barge freight values have increased by 10-15% on the Mid Mississippi and Illinois River as river conditions have failed to improve. Tow sizes have been cut and the rains we can expect over the next 3 days will not help much. Some scattered rains moving across Iowa, Illinois and the Northern Plains this week will not be enough to improve the export waterways. Option expiration on November soybeans is tomorrow and many have been exiting their November positions ahead of first notice day next week. Soybean spreads were firmer to start the day and finished with a weaker close. US producers have packed their beans away and may be bringing the remaining excess to the market as they run out of space. Additionally, if the river drops bids, grain will flow to the processors and the spreads can get away with less work. Cutting a leg out from under the bean carries that have been present all year may not be enough to convince farmers to ignore the low cash values and focus on small market shifting opportunities. If you were operating at or below breakeven all year with 60% left to sell, are you looking for base hits or homeruns? Many will take the chance on demand stepping in between November and December before they begin to pull beans out of the bins. Corn yields continue to impress and confirmation of the USDA’s record estimate will be confirmed and may even increase in next month’s report. The massive corn crop and efficient harvest progress creating a bottleneck has been the main support for corn spreads.
October Precipitation Ranks are remarkably dry as many of the brown areas below rank in the top 3 driest years in the last 132 years.
The River Gauge at Memphis is at -9 feet and is expected to remain that low for the next week. Harvest is close to complete south of St. Louis, but boats navigating the lower Mississippi are not able to efficiently move grain to the Gulf.
Calendar Spreads
Spread | Last | Chg | Full | % of FC |
CZ24/CH25 | -13 1/2 | – 1/2 | -30 3/4 | 44% |
SX24/SF25 | -8 3/4 | -1 1/4 | -26 3/4 | 33% |
SX24/SN25 | -45 1/2 | -2 3/4 | -106 1/4 | 43% |
MWZ24/MWH25 | -21 3/4 | +1/4 | -30 3/4 | 71% |
WZ24/WH25 | -19 1/4 | +1/2 | -24 1/4 | 79% |
KWZ24/KWH25 | -14 1/4 | +1/2 | -24 1/4 | 59% |
Cost of Carry
Daily Trading Limits:
Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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