Written Commentary
MORNING AG OUTLOOK
Grains are marginally lower. US stocks are higher. Nividia earnings were good but not great. USD is lower. Crude is lower. Gold is higher. US Midwest forecast is mostly dry but cool. Rain today in Chicago, S KS, OK and AR.
SOYBEANS
SX is near 10.45. Soybean market entering demand bear market. BOZ is near 52.72. SMZ is near 287.9. Dalian soybean, soymeal, soyoil and palmoil futures were lower. Global soymeal supplies are tight but maintenance period is over which should add to global soymeal supply. SMU-SMZ is +3.00 but SMZ-SMH26 is -10.00. China announced a 164 mt auction of soybeans from reserve. It could as high as 3 mmt. There are 590 soybean contracts registered for delivery, 475 soymeal (-40 overnight and 707 soyoil. Weekly US soybean export sales are est at 450-1,000 mt vs 1,142 last week.
CORN
CZ is near 4.06. 4.05 is support. CU-CZ spread at -23 suggest adequate corn supply. US lakes are competitive to W EU. US gulf to EU and N Africa and PNW to Asia. US record large 2025 corn supply should weigh on futures, basis and spreads. Domestically, demand for ethanol and feed use is on the rise and competes for exports. Weekly US ethanol production was down slightly vs last week. Stocks were down from last year. Margins remain positive. Record US corn and soybean crops could pressure US storage capacity. There are 0 corn contracts registered for delivery. Weekly US corn export sales are est at 1,200-2,600 mt vs 2,859 last week.
WHEAT
WZ is near 5.22. WZ range 5.00-5.50. KWZ is near 5.10. MWZ is near 5.88. Even in 2016 a year of global wheat oversupply wheat futures bottomed in September. HRW futures and spreads are down due to increase competition for Dec-Feb World trade. There could also be some HRW wheat cash selling to make room for record US corn crop. HRS futures dropped on increase harvest pressure and talk of good yields. There are 34 Chicago wheat contracts and 419 KC wheat registered for delivery. Weekly US wheat export sales are est at 400-700 mt vs 519 last week. Russia is lower prices to increase exports.
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