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Morning Market Review for Nov. 12, 2019

Cold weather doesn’t heat market. (Comments are updated by 7:30 a.m. Central Time.)

Overnight trends:
Corn: Steady
Soybeans:  Steady to down 1
Wheat: Steady to up 3

Futures wait for more news about exports and trade

Grain futures are little changed this morning following a choppy overnight session. Markets remain focused on trade talks with China, waiting for a speech by President Trump today for clues about progress in the negotiations.

Record cold temperatures blanket much of the country today with more snow forecast for the upper Midwest and Great Lakes later this week. Otherwise, growers should have drier conditions for trying to wrap up harvest, at least for a while. Official 6 to 10 and 8 to 14-day forecasts out yesterday show a return to above normal temperatures and precipitation, with the latest updates from the ensemble model brining in precipitation sooner.

Growers posting Feedback From The Field over the past month report corn  yields close to the 167 bushels per acre estimated Friday by USDA. The soybean average is still running better than the 46.9 bpa found by the government.

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Stocks rallied around world this morning on hopes for progress in the trade talks, getting a boost from reports the U.S. could delay tariffs on auto imports from Europe. U.S. stock index futures point to a firm open on Wall Street so far.

The dollar continues to gain favor but other safe havens, including gold are Treasuries are weaker.  Crude oil is trying to move back above $57 a barrel on hopes a better global economic will increase demand for fuel.

Corn market

Corn prices are steady, keeping December futures to an inside day as they continue to trade around the support line from the October downtrend.

With USDA’s November production, supply and demand report out of the way the market faces a relative lack of data until the next, and final, update comes out in January. USDA will report only harvest progress in today’s weekly report.

Today’s export inspections likely won’t show a whole lot of improvement as shippers race to fill barges before the upper Mississippi River closes for winter. Barge freight rates moved higher again Monday on that demand, weakening bids on the river system Ethanol plants continue to boost their basis to attract feedstocks in areas affected by the late harvest.

The preliminary report from the CBOT showed daily futures volume down a third Monday to 445,812 and 107,965 of that was done in the December-March spread on the Goldman roll, when traders following the index move positions out of the nearby. Open interest was up 4,545 on active new fund selling from bearish funds.

Options volume fell 55% to 86,311, 62% of it calls as traders liquidated deep-in-the-money December puts. Implied volatility in at-the-money December options dropped another 1.4% to 16.35%.

Overseas markets are mixed today. January futures in China fell 3.6 cents to $6.682 while March Paris futures are three-quarters of a cent higher at $4.694 after adjustments for volumes and currencies.

Botton line: Friday’s USDA reports are the last chance in two months for an injection of bullish news. But strong basis in many areas is a marketing opportunity, because buyers are scrambling. For more, see my Corn Outlook. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily.

Soybean market

Soybeans are mixed as a choppy overnight session winds down. January futures are holding Monday's six-week low, with traders waiting for more news about demand from China.

Terminal basis was firm yesterday with better bids also noted off the PNW on demand from Asia. Bids weakened on parts of the river system due to the increase in barge freight rates, with export inspections out today likely remaining seasonally strong.

Deliveries against November fell to 233 contracts today, all along the Illinois River.

The preliminary report from the CBOT showed daily futures volume down 14% yesterday to 200,999 while open interest was up 7,374 on likely new fund selling.

Options volume was 24% higher at 70,070, 60% of it puts as traders added nearly 6,000 each of July $7.80 and $8 puts. Implied volatility in at-the-money January options fell to 11.45%.

Vegetable oil markets in Asia ended mixed in Asia today. January soybean oil futures in China rose two-tenths o a cent to 41.89 cents per pound but January palm oil futures in Malaysia gave back a quarter cent to  after hitting a two-year high Monday.

Oilseed markets internationally are higher. January soybean futures in China ended up a half-cent at $13.259, February rapeseed futures in Paris afternoon trade gained a half-cent to $9.806 and January Winnipeg canola overnight rose 1.5 cents to $7.948 after adjustments for currencies and volumes.

Bottom line: The full extent of Chinese demand is still unknown, making supply the best hope for rallies. But more news about that won’t be coming until January, which could leave the market drifting. For more, see my Soybean Outlook. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily.

Wheat market

Wheat prices mostly higher this morning. While soft red winter wheat is still stuck in a one-week downtrend, HRW is testing its 100-day moving average.

Minneapolis overnight held the near-two-month low posted Monday. Spring wheat premiums jumped 20 cents in Minneapolis yesterday on the heels of USDA’s cut in the size of the crop Friday. But that wheat may be a little too pricey for some customers.

Japan will fill less of its regular weekly tender with U.S. wheat and buy more from Canada. The U.S. share of the 4.3-million-bushel deal will fall to 23% with Canada getting a larger piece of the action in addition to Australia. No U.S. spring wheat is included in this week’s tender.

The preliminary report from the CBOT showed SRW volume steady at 163,559 with 38,930 of that done in the December-March on the Goldman roll. Open interest fell 400 on that liquidation despite light new fund selling.

SRW options volume was 24% lower at 19,021, 71% of it calls as implied volatility in December at-the-money options edged higher to 17.67%.

Volume in HRW wheat fell 2% to 105,694 with 28,992 done in the December-March. Open interest was down 455.

Overseas markets are steady to higher today. January futures for Eastern Australian Wheat settled 4.7 cents higher at $6.379, with some fields in the east and south threatened by bushfires after three years of drought. December wheat futures in Paris afternoon trade are steady at $5.314 after adjustments for currencies and volumes.

Bottom line: Look for opportunities in the cash market, because futures should stay sluggish until exports pick up. For more details on the outlook, see the Wheat Outlook. For specific recommendations and daily charts, subscribe to our free E-newsletter, Farm Futures Daily.

 

Pivots111219.jpg

 

Investopedia says a pivot point is a technical analysis indicator, or calculations, used to determine the overall trend of the market over different time frames. The pivot point itself is simply the average of the high, low and closing prices rom the previous trading day. On the subsequent day, trading above the pivot point is thought to indicate ongoing bullish sentiment, while trading below the pivot point indicates bearish sentiment.
 
Senior Editor Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Advisor. He conducts Farm Futures exclusive surveys on acreage, production and management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on www.FarmFutures.com he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association. And you can follow Farm Futures throughout the day on Twitter at www.twitter.com/farmfutures, and be sure to like or follow the new Farm Futures Facebook page.
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