11/21/18

Morning Comments - 11/21/2018

CBOT Mixed Awaiting Early Close and Turkey Dinner; News Overnight Mostly for Wheat

 ** Happy Thanksgiving To All of our US Clients. ARC will produce our AM and Noon wires today/Friday and the long-term weekend Outlook on Saturday.
** 6:30 AM CDT CBOT Prices: Jan beans are down 4.0 cents at $8.77, Dec corn is unchanged at $3.6125 while Dec Chi wheat is unchanged at $5.0075.

 ** AgResource AM Grain & Oilseed Comment: Good Morning! It has been a mixed and low volume overnight CBOT trade with soybeans lower while the grains hold around unchanged. The CBOT will close early at 12 Noon via the US holiday.   World equity and energy markets are in recovery following sharp declines in recent days. The bounce is based on both markets being technically oversold.

  The USTR released a statement overnight suggesting that China has failed to alter its unfair trading practices under Section 301, which are at the heart of the ongoing US/China trade dispute. This is not a surprise, but the report will help China Trade hardliners within the administration argue that China is in denial/abeyance, and that the US tariffs should rise to 25% in early 2019.

  Russian wheat exports have fallen sharply on the week amid a combination of adverse weather and self-regulation. ARC reported at noon yesterday that November 1st Oblast grain stock data showed that SE Russian wheat supplies were dramatically lower than last year by 60-80%. Russian exporters are having to pull wheat from the far west at a high cost. And Russian grain exporters have pledged to the Gov’t not to exceed a specific allocated tonnage levels. Russian exporters are not selling wheat beyond December due to these pledges. Amid rising interior cash wheat/flour prices, Russian wheat exports are set to decline sharply from mid to late December onward into July.   

  Ukraine’s National Railway has restricted grain shipments to key ports of Odessa and Mykolaiv yesterday with those restrictions expected to be lifted by the weekend. No explanation for the transit slowdown was offered.

  US farmers/bankers are asking the USDA and Trump Administration to release and announce the next tranche of Trade Aid. The aid is needed, but the Administration looks like it wants to wait until after the G20 Trump/Xi dinner to decide if a trade deal can be reached, and the new assistance is needed?    The South American weather forecast is generally favorable, but less rain across C and N Brazil is desired following weeks of above normal precipitation

  ARC looks for a two-sided CBOT trade with the US export sales report to be released Friday AM. ARC research argues that wheat/corn values are too cheap.

** 10 Day EU Model Rainfall and Temp Forecast Anomaly for North America: 

** November 1-December 1 Percent of Normal Rainfall: Drought Deepens! 

 

 

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