Corn continued Friday's rally, soybean fought back from solid losses to close fractionally lower, & wheat was under renewed pressure on Monday as traders positioned for the Thanksgiving-shortened week & reacted to Friday's Commitments of Traders data. Corn found support from news that managed trading funds had acquired a record-high net short position in futures & options. Soybeans also found support from the commitments report. News of last week's aggressive reduction in managed fund long positions eventually countered early losses that were driven by extended forecasts that called for rainfall in central Argentina that have recently turned dry. Wheat suffered after the commitments data indicated funds had liquidated more of their short position than had been expected. Monday's USDA Weekly Grain Export Inspections data did little to change price direction. The report was near expectations, but continued to show this year's exports are falling further behind last year's export pace. At the close, Dec. corn futures were 2c higher, Jan. beans edged 1/2c lower, Dec. soymeal gained $1.60/ton & Dec. soft red winter wheat tumbled 5.25c.
In export news, USDA did not announce any US export sales on Monday. China's Finance Ministry has announced it will exempt dried distillers grains imports from its value-added tax starting on Dec. 20. China will retain, however, the anti-dumping & anti-subsidy tariffs it previously applied on US DDGS imports. China had indicated it would remove the VAT following talks between Presidents Trump & Xi Jinping, but had not previously established a timeline. After having tendered for wheat last week, Turkey bought 8.451 mb of European wheat for shipment by Dec. 15 on Monday.
Monday afternoon's USDA Weekly Crop Progress data for the week ended Nov. 19 reported steady harvest progress with farmers in the western Corn Belt maintaining a faster pace than those in the eastern Corn Belt. In particular, farmers in Indiana, Michigan, Ohio, Pennsylvania & Wisconsin are running behind normal due to wet soil conditions. USDA now considers winter wheat planting completed & reports that emergence is equal to the 5-year averages.
Monday's USDA report indicated that 90% of the major states' corn crop harvested as of Nov. 19--up 7% for the week, but 6% behind last year & 5% behind the 2012-16 harvest pace. Southern corn harvest corn is about 98% done, while the eastern Corn Belt is about 83% finished, & the western Corn Belt is nearly 92% done. WCB farmers shelled an additional 8% of their corn crop last week, while ECB producers binned 7% of their corn acreage. Harvest is especially behind normal in Michigan (76%), Ohio (79%), Pennsylvania (78%) & Wisconsin (69%). USDA estimated that 95% of the Illinois & 87% of the Indiana corn crops were harvested as of Sunday--up 5% & 7%, respectively, for the week. Corn harvest is complete in southwest Illinois. Only 1% of the crop remains standing in southeastern Illinois.
USDA indicated that 96% of the 18-state soybean crop has now been harvested--up 3% for the week, but 2% behind last year & 1% behind the 5-year average. WCB farmers have combined about 98% of their bean acreage, ECB producers are about 90% done with bean harvest & Southern farmers have cut about 88% of their bean crop--up 2%, 4% & 6%, respectively, for the week. Illinois farmers are finished with bean harvest--up 5% for the week. Producers in both SW & SE Illinois are also done. Indiana producers had combined 92% of their bean crop as of Sunday--up 3% for the week.
Monday's data reported that US 18-state winter wheat planting is completed. Southern farmers are still planting soft red winter wheat, but that is usually the case in mid-November. USDA indicated that 88% of the major state wheat intentions have emerged--up 4% for the week & equal to the 5-year pace. USDA estimated that 92% of Illinois wheat acreage intentions & 83% of Indiana wheat intentions have emerged--up 7% & 6%, respectively, for the week. USDA rated 18-state winter wheat conditions at 52% good-excellent this week--down 2% from last week & 6% below the same-week 2016 rating. Our 27-state US wheat index declined 0.4% to 97.9% of "normal" this week as deterioration in the soft red winter (102.6%, down 0.3%), the hard red winter wheat (95.5%, -0.3%) & the soft white winter wheat (105.9%, -1.4%) indexes were seen.
Weekly export inspections of soybeans were near the upper end of trade expectations, corn shipments were in the middle of trade guesses, & wheat & grain sorghum inspections were at the low end of trade expectations in the week ended Nov. 16. Each of those grains trailed same-week shipments from 2016, & cumulative 2017/18 exports of corn, grain sorghum, soybeans & wheat each fell further behind last year's rates.
Weekly corn export inspections improved to a still sluggish 249121 mb--up 58.9% from the previous week's upwardly revised total (15.682 mb, +0.881 mb) & the highest weekly corn inspections in four weeks. Trade expectations had ranged 19.7-27.6 mb, & last year's weekly shipments were 34.487 mb. Mexico (11.628 mb), Peru (4.091 mb), Colombia (3.314 mb), Saudi Arabia (2.791 mb) & Panama (1.014 mb) were the only nations that took at least 1 mb of corn last week. Eleven weeks into the 2017/18 marketing year, cumulative corn shipments have reached just 259.189 mb--202.930 mb (-43.9%) behind last year's pace. USDA currently expects 2017/18 US corn shipments at 1,925 mb--368 mb (-16.0%) below last year's total. Brazil has been the largest corn exporter in the world since summer. That continues.
Last week's grain sorghum exports declined to 2.587 mb--down 53.7% from the previous week's upwardly revised total (5.592 mb, +2.325 mb). China (2.113 mb) & Japan (0.412 mb) took most of last week's shipments. Cumulative 2017/18 milo inspections total 27.860 mb--down 4.641 mb from last year's initial 11-week shipping pace.
Inspections of soybeans declined to 5-week low of 78.314 mb last week--down 2.5% from the previous week's upwardly revised total (80.292 mb, +3.591 mb) & 19.950 mb below the same-week inspections of 2016. Traders had expected 66.1-80.8 mb of shipments. China (61.748 mb) dominated the list of 9 nations that took at least .808 mb of soybeans last week. Eleven weeks into the 2017/18 marketing year, cumulative beans shipments total 704.952 mb--101.128 mb
(-12.5%) behind last year's record pace. USDA sees new-crop bean exports reaching 2,250 mb--76 mb (+3.5%) above last year's record. That forecast continues to be at risk, & quite likely will require South American bean output to decline in the coming year.
Wheat inspections were disappointing at just 9.526 mb last week--down 15.9% from the previous week's also sluggish results (11.332 mb, +0.271 mb). Trade expectations had ranged 9.2-16.5 mb. The Philippines (2.561 mb), Algeria (2.277 mb), Ethiopia (1.745 mb) & Mexico (1.598 mb) were the only nations that took at least 1 mb of wheat last week. Wheat inspections for 2017/18 now total 440.762 mb--32.095 mb (-6.8%) below 2016. USDA currently forecasts 2017/18 wheat exports at 1,000 mb, down 55 mb (-5.2%) from last year's results. Russia is still likely to be the world's largest wheat exporter this year.
Locally, corn basis rose a penny, soybean basis declined 1.5c & wheat basis was steady on Monday. St. Louis barge freight eased to its lowest level since Sept. 11 as grain movement slows & the Midwestern harvest nears completion.
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"Closing Comments" are written by David Marshall, First Choice Commodities LLC, Nashville, IL. To learn more about his farm marketing advisory or commodity brokerage services, contact him at email@example.com or call (618) 327-4370 (voice/fax) or (618) 314-0918 (cell). This commentary is not intended for specific trading strategies. We strive to insure this information is reliable, but we cannot guarantee its accuracy or completeness. Commodity trading involves risks. You should fully understand those risks before trading.