CBOT Catches Breath Following USDA Report; Values Little Changed Overnight

Nov 10, 7:06 am | Morning Commentary | Share this:

** 6:30 AM CDT CBOT Prices: January soybeans are down .50 of a cent at $9.8425. Dec corn is unchanged at $3.415, while Dec Chi wheat is down 1.25 cents at $4.2775.

 ** AgResource AM Grain & Oilseed Comment: Good Morning! CBOT prices are mixed and little changed following an active night of trade in corn, with more normal activity in soybeans and wheat. Much of the corn volume was spreading and it did not have a sizeable impact on flat price.

  Thursday’s CBOT open interest was up a big 25,915 contracts in corn, up 12,029 contracts in soybeans, and down 8,133 contracts in wheat. Funds piled into a larger net short position following Thursday’s bearish November crop report. The news will be seen as supportive for today’s trade.

  There were 130 contracts of November soybeans tendered for November delivery with no strong stoppers noted.

  This afternoon’s Commitment of Traders report is reflected to show that funds are holding a record large net short corn position and a sizeable net short in wheat. In beans, funds are moderately long some 50,000 contracts. Funds have yet to liquidate long soybean/short grain spreads.

  India doubled its wheat import tax to 20% in a bid to stave off cheap imports. The move was expected and should not have much impact on world wheat prices. India has been informing the wheat market of the increase for weeks.

  European wheat futures are down .25 euros/MT with Paris Dec at $160.00/MT. Malaysian December palmoil futures closed 5 ringgits lower at $2,781/MT in thinning volume trade.

  South America weather is favorable for the next 10 days. Additional rain will benefit Northern Brazilian soy crops through the weekend while needed dry weather advances spring planting across Argentina and S Brazil. High temps range from the mid 70’s to the lower 90’s – which is close to seasonal averages. There is a rain chance for Argentine growing areas mid next week which looks to push northward through S Brazil. The seasonal temps and dry weather pattern is helpful for Argentine and S Brazilian crops at this time. Dryness that continued into December would be more worrisome. 

  Two Chinese crushers have slowed or halted operations as they wait for imported soybean supply. The movement of soybeans from ports to interior crushers has been slow in China, and record imports of nearly 8-9 MMTs of soybeans are expected during November and December. Domestic soymeal supplies are tight which is expected to maintain profitable crush margins. China will be active securing soybeans on any CBOT break below $9.80 January.

  The USDA November report confirmed large US and world supplies of a grain and a sideways CBOT into the US Thanksgiving Day Holiday – and potentially 1st notice day against December futures. Funds are already short a pile of grain and China is active securing dips in soybeans. Only a South American weather scare can spark fund short covering and a sustained CBOT recovery.