Written Commentary
CLOSING COMMENTS
Ag Fundamentals:
This morning the USDA announced a flash sale of corn, 120K MT to both unknown and Japan each. Soybeans are ahead of the 5-year average harvest pace by 11% as of yesterday. Corn harvest is also ahead of the 5-year average by a whopping 17%. The US is basically a week ahead of schedule. Quality has been good. The only issue has been low moisture values which also allowed for farmers and elevators to allocate space without having to worry about putting wet grain near the dryers. Flowability of the grain has also been a benefit. Brazil has made major progress on planting soybeans over the last week. they have been able to jump from 25% planted last week to 56% this week. Mato Grosso is only -7% behind the 5-year average and -14% from the soybean planting progress this time last year.
Weather:
Rain is expected to move across North Dakota into northern Minnesota on Tuesday night and Wednesday morning. The heavier rains are expected to move across eastern Kansas, Missouri, southeast Iowa and into western Illinois and southern Wisconsin between Wednesday and the end of the weekend. The river valleys could use twice as much rain as expected, but they will take what they can get. Soil moisture, river levels and precip forecasts going into winter will become very important for spring planting and export values remaining globally competitive. The western half of the US is expecting snow in the next 7 days, capping the Rockies. Brazil rain is good withing the central growing ally, and more rain in the southern regions is expected in the 8-14 day forecast.
Mato Grosso, Brazil has made some solid planting progress over the last 7 days. They are just -7% below the 5 year average pace now. They are -14% behind last year’s planting progress at this time.
South America’s 7 Day Precip Anomaly Map has dry pockets in both the southern Brazil and northern Brazil regions.
South America’s 8-14 Day Precip Anomaly Map shows more rain covering the dry areas in southern Brazil and northern Argentina.
US Harvest Progress
Soybean harvest progressed +8% harvested week over week to 89%.
Corn harvest progressed +16% harvested week over week to 81%.
Calendar Spreads
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Cost of Carry
I would expect spreads to weaken into month end as farmers round up the last 12% of soybean harvest. First notice day is Thursday and may have already shifted positions from November to January after the shake out last week.
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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