Market Commentary  11/16/18 3:24:38 PM Printer Friendly VersionPrinter Friendly Version

Friday, November 16, 2018

Corn closed 3 cents lower in uninspired trade. For the week CZ lost 5 cents. Funds hold an estimated long position of 15,000 contracts. Harvest progress kicked back in this week and Monday’s progress report should reflect this and would expect harvest 90%+ complete. Producers are sellers of corn coming off the combine, at least to some degree, but once harvest stops for them, so apparently does selling interest. A range bound futures trade is not generating much excitement. The weekly ethanol report showed continued good usage of corn but crush margins remain worrisome. In export announcements this week Mexico picked up 212 tmt. Weekly export sales this morning at the upper end of expectations but still a bit disappointing at 35.1 mln. bu. (we need 36 mln. bu. a week in sales to meet USDA projections.) YTD commitments are 922 mln. bu. vs. 801 mln. bu. last year. Japan and Mexico the main buyers this week. These two countries account for 54% of known destination sales.
Wheat futures were mixed today with Chicago WZ up 5 cents this week. Weekly export sales at 16.1 mln. bu., bringing YTD commitments to 521 mln. bu. vs. 617 mln. bu. last year. Funds continue to hold an estimated short position of 50,000 contracts. The trade continues to watch for export sales improvement as a marker that futures can rally.


Soybeans closed 3 cents higher as mid-morning tweets rallied the board from moderate losses. For the week SF gained 5 cents. Funds are estimated short 52,000 contracts. Soybean harvest able to resume in limited fashion this week. Yesterday’s on again off again news updates regarding U.S. not implementing additional tariffs on China roiled the markets and more of the same this morning with President Trump tweeting China wants to “make a deal” and more tariffs may not be necessary. Trade soybean futures at your own peril, which is what producers, in essence, are doing as they hold a huge percentage of U.S. soybean ownership. Weekly export announcement added up to 425 tmt of sales to unknown destinations and the NOLA Oct crush report was record large at 172.35 mln. bu. Weekly export sales came in at 17.3 mln. bu. with YTD commitments at 817 mln. bu. vs. 1,197 mln. bu. last year. We need 26 mln. bu. of sales a week to meet USDA export projections. Japan and the Netherlands the buyers of note and China cancelled 7.1 mln. bu. of purchases. Brazil weather is too wet in some areas but still viewed as beneficial to crop development and Argentina is expecting rain next week.
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