AM Comments 11/05/14

Wednesday, November 5, 2014, 7:11 AM
Submitted by: Dustin Weiner

After yesterday’s weaker trade, the overnight markets found additional follow-through selling – especially in soybeans.  January soybean futures were up 66c last week and as I type this they are 49c lower (so far) this week!  Taking the blame for the lower move is a combination of: decent farmer selling, an overall lack of fund or spec buying, and a USDA report out this coming Monday.


Informa Economics released their estimates on U.S. crop sizes yesterday...  They had the corn crop a touch larger than what the USDA had last month calling it a 14.49 bb crop using a 174.4 bpa yield.  They had the soybean crop also a bit higher than the USDA, calling it a 3.99 bb crop while using a 47.9 bpa yield.  Of course, all of these private numbers mean very little to the market long term because whatever the USDA releases on Monday will be what we trade off of.  When the report is released it will feel almost like a reset button, aligning the thoughts of traders if even for just a moment.


If these crop are as expected, bullish news could be hard to find over the coming months as the U.S. chews on surplus supplies.  If we are to see rallies we may need to see some sort of issue with the crops (especially soybeans) in South America.  (So… you may want to prepare yourself for South American weather reports on a regular basis from not until January).  Planting progress has been a bit delayed so far this Fall down there.  A few weeks ago Brazil was battling dry weather while Argentina has dealt with fields that are too wet to plant!  Since then, Brazil has received a few rains which allowed farmers to put some soybeans in the ground.  As of month end October, Brazil was 22% planted on soybeans vs 46% on average while Argentina has yet to report planting progress.  This overall delay in planting could equate to harvest delays which would allow for an additional couple weeks of export soybean demand to hit the U.S. this crop year. 


Overall look for lower prices today as the market settles down and starts to feel that much of the panic buying the previous week or two was unnecessary.  Also worth mentioning is that crude oil made news lows for the move yesterday and it feels like commodities in general are bit heavy right now, making them much easier to sell vs buy…


Opening Calls

Corn down 2 to 4 cents

Soybeans down 8 to 12 cents


Have a great day!





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