November 16, 2018

Markets Search for Trade Indications

November 13th, 2018

Good Morning from Allendale, Inc. with the early morning commentary for November 13, 2018!

Grain Markets traded in tight ranges with light volume during the trading session.  Wheat futures had the biggest gain with December wheat up 17.25 cents closing at $5.1975 due to light trading and significant fund short covering and export optimism. Today, traders look to the delayed export inspection and crop progress data. The US dollar could add pressure as it trades at multi-month highs.

Weekly Crop Progress Report was postponed due to Veteran’s Day and will be released at 3pm CST today.  Trade is looking for corn harvest at 88% complete (76% last week, 86% five-year average), soybean harvest at 90% complete (83% last week, 93% five-year average). Winter wheat planting expected at 90% complete (83% last week, 93% five-year average).  Winter wheat rating is expected at 52% GTE (51% GTE last week).

Russia and China are in talks about more Russian regions being approved to export wheat to China, said Russia’s ambassador to China, Andrey Ivanovich Denisov. Russia exported 18,000 tonnes of wheat to China in 2017, only 0.4 percent of China's total imports.

Managed Funds as of 11-09-2018, showed wheat futures net short 57,100 contracts, corn futures net long 17,600 contracts, soybeans futures net short 49,100 contracts, soymeal futures net long 6,500 contracts and soyoil futures net short 66,200 contracts.

Funds yesterday were estimated buyers of 5,500 corn contracts, 2,000 soyoil, and 7,500 wheat. They were sellers of 4,500 soybeans and 1,000 soymeal.

Brazilian Exporters are forecast to sell a record volume of soybeans this year as China's demand remains strong.  Brazilian shipments, the world's largest exporter of the oilseed, are expected to be over 80 million tonnes in 2018, according to shipping agent Williams.

U.S. Ethanol Producers showed a bleak picture in quarterly filings and analyst calls recently, detailing how the farm belt business has been devastated by the US - China trade war and biofuels management policies they feel have been more favorable towards oil refiners.

Indonesia is estimated to import 500,000 heads of cattle in 2018 (571,449 head in 2017).  Indonesia imported 353,790 head of cattle from January to October 2018.  Indonesia is planning to import 91,859 tonnes of beef in 2018 (94,132 tonnes of imports in 2017) according to their agriculture ministry.

Chinese Animal Feed Maker, Tangrenshen Group, reported feed produced by one of its units had been contaminated with African swine fever.  This is the first reported contamination of feed supplies in China, and heightens concerns for pig farmers trying to avoid the disease.  It also puts more economic pressure on feed manufacturers already struggling to deal with low margins and slowing demand.

Dressed Beef Values were higher with choice up 0.35 and select up 1.67.  The CME Feeder Index is at 150.59.  Pork cutout value was up 0.56.

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