News > Top Ag News > Midday Comments: 11/24/2020

Midday Comments: 11/24/2020

Nov 24, 2020

Led by a sharp rebound in wheat, grain futures have rebounded from overnight losses during Tuesday’s regular trading session.  Although there was little change in the South American weather forecast, soybeans led corn & wheat lower during Monday night’s trading electronic session as profit-taking ahead of the Thanksgiving Holiday was triggered by reports Chinese soybean processors had “washed out” several cargoes of US soybeans last week due to weak crush margins.  The physical cancellation of shipments would seem bearish, but historically such transactions are often offset by the resale of “cancelled” purchases to another Chinese or other Pacific Rim buyer.  We suspect traders remain wary of Chinese commitments, whether it be the 431.0 mb of corn, the 1,051.4 mb of beans or the 63.3 mb of wheat that were on the books as of Nov. 12 for delivery in 2020/21.  Ultimately, the size of US exports to China will hinge on South American weather & the ability of their producers to grow enough crops to meet the globe’s expanding export demand.  At the 7:45 am pause in electronic trading, Dec. corn futures were down 6c, March corn was 6.25c lower, Jan. beans were down 12.25c, March beans were 11.75c lower, Dec. soymeal was up $0.50/ton, Dec. soyoil was 0.66c/lb. lower, Dec. SRW wheat was down 1/4c & March SRW wheat was 1.25c weaker.
 
USDA’s Weekly Crop Progress report that indicated US winter wheat conditions declined 3% to just 43% good-excellent underpinned wheat as trading resumed on Tuesday morning, while South American weather prompted buying at the open in corn & soybeans.  Grains have rallied thru Tuesday’s noon hour as prospects for smaller global supplies brought buyers back.  Monday’s USDA Cold Storage report suggested meat demand--& thus grain feed usage--remains robust. USDA indicated that frozen pork supplies declined 17.462 mil.lbs. in October & plunged 163.760 mil.lbs. lower (-26.8%) to 448.157 mil.lbs. at the end of October.  That was the lowest Oct. 31 pork stockpile since 2005!  End-October frozen chicken stocks were down 4.4% & frozen turkey supplies were 4.1% lower than last year.  While frozen beef supplies were up 34.207 mil.lbs. (+7.3%) from last year, total red meat & poultry supplies in freezers were down a total of 197.393 mil.lbs. on Oct. 31.  The Cold Storage data are a reminder that US consumer & export demand for meat continues to be solid. Corn was only fractionally lower, soybeans were mixed & wheat leapt to double-digit gains by late in the noon hour.  At 1:06 pm, Dec. corn futures were down 1/2c, March corn was 1/4c lower, Jan. beans was up 3/4c, March beans were 1.25c higher, Dec. soymeal was up $2.40/ton, Dec. soyoil was 0.41c/lb. lower, Dec. soft red winter wheat was up 12.25c & March SRW wheat was 12.75c higher.
 
In export news, USDA did not report any daily export sales on Tuesday. On Monday, the farm agency announced that 13.149 mb of 2020/21 US were sold to unknown destinations.  Tunisia reportedly bought 2.756 mb of durum, 3.380 mb of milling wheat & 3.445 mb of feed barley. South Korea will seek 2.962 mb of US soft white, hard red winter & northern spring wheat on Thursday. 
 
Locally, corn basis was a penny higher c, soybean basis was 3c lower & wheat basis was steady on Monday.  Grain & livestock futures exchanges will be closed on Wednesday night, Thursday & Thursday night, & Friday will be a shortened session.  If history is a guide, most elevators are likely to be closed on both Thursday & Friday.
 
 
Would you like CBOT futures prices reported to your phone? Top Ag can send you nearby & harvest futures prices for corn, soybeans & wheat at 9:45 am, 11:15 am & 1:45 pm each day.  We provide the service for free, but you may have to pay for text messages--depending upon your phone plan. Call Scott or Jacob at Okawville at 243-5293 or Mike at Trenton at 224-7332 & we'll get you set up! 
 
"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 dmarshall@firstchoicecommodities.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.
 


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