Closing Markets: Corn: -0.25.
Beans: +1.50. Wheat: +5.
All TFG locations will be closed on Thursday, November 27th and Friday, November 28th for the Thanksgiving Holiday. The Monticello office will be open from 8am-12pm on Friday, the 28th for any customer needs. Thank you and have a safe and Happy Thanksgiving!!
Good evening!
Market Recap-
Ag markets saw quietly higher trade on Tuesday, as price action more or less just reversed what happened yesterday in an equally dull and uneventful fashion. Wheat futures, which were the leaders to the downside on Monday, led to the upside today, while corn and soybean markets saw almost identical trading ranges to yesterday as news continues to be slow and volume limited ahead of the end-of-week holiday on Thursday. Amid the ongoing back-and-forth on the US-China trade deal and quickly declining levels of market interest over the first two days this week, there just aren't many around who are interested in taking on new positions at this point; this likely keeps the trade quiet again tomorrow.
Corn Summary-
Corn futures saw another day of quiet trade on Tuesday, with volume light, trading ranges small, and attention limited as like the past several days, there continues to be little new on the fundamental front that has given traders anything to get excited about. Ahead of Friday's first notice day on the December contract, the Dec/March spread widened out to a new two-week low this afternoon and tested the 200-day moving average, but there just isn't a lot new to speak of otherwise. Traders are lamenting the USDA's gradual approach to data catch-up, which would lead us to argue entirely "normal" trade doesn't return until after the first of year. We've gone from getting no data to getting data that is old and doesn't mean much of anything; its the return of meaningful updates from the USDA that fully re-engages everybody, and this doesn't occur until after January 1. Rangebound trade likely stays common in the meantime.
Soybean Summary-
Ongoing rhetoric out of Trump and his administration regarding China and their purchases of US soybeans was able to barely lift bean values on Tuesday, but did little else as traders are growing tired of the back-and-forth on the situation that has been going on for the better part of the last four weeks now. Product markets, meanwhile, got back to spread trading throughout most of the day before closing higher after both trading lower on Monday, though global cash markets and the record crush in the US would lead us to believe the upside in meal is mostly limited from here. On the oil side, there were rumors that the EPA had refuted a claim last week regarding RIN credits on imported feedstocks, though we were unable to find any confirmation of this rumor throughout the day today. Otherwise, price direction and trader sentiment is almost completely tied to the China situation, whether they like it or not, and we don't expect this to change much in the short term. An announcement from the EPA would be a caveat to this, but your guess is as good as ours as to whether this occurs and when.
Wheat Summary-
Chicago wheat futures got back the 3-5 cents that they lost on Monday by the close today, but were otherwise quiet with the rest of the space as here too trader interest was in noticeable decline. Crop-wise, the market has seen planting updates out of the US and Europe this week and has also seen harvest updates from Australia and Argentina, but none of the data has had much of any effect on prices as growing conditions across are about as "normal" as a situation spanning multiple continents can be. The other talking point early this week has been the war in Ukraine, which seems to have retaken center stage amid a lack of a whole lot else going on. Officials from the Trump administration said on Tuesday that the Ukrainians had agreed to the US-proposed peace deal, but that details still needed to be worked out. With part of these "details" assumed to be land/borders, which has been a major sticking point since day one, we are curious as to just how close a deal really is.
Outside News Headlines-
Crude oil futures: down 80-90 cents/bbl
Stock index futures: The Dow Jones index is up 600 points, the S&P500 index is up 50 points, and the NASDAQ is up 60 points
US $ Index: down 40-50 points
Weather Updates-
Models are having trouble with the coming winter storm system that is expected to impact the Midwest the back half of this week and weekend, but are otherwise unchanged from Monday's runs in the bigger picture. There's no question that moisture impacts generally the eastern half of the US over the next four-six days, but whether this moisture comes as rain or snow and exactly how much of either precip type accumulates will be difficult to forecast.
The first low pressure system looks to work through the northern Midwest and parts of MN/WI and then into the Great Lakes tonight, with snowfall possibly reaching 4-5". As that system then exits the northeastern Midwest, low pressure system number two will be working into the northwestern US, and is then expected to make it across to the Midwest by Saturday and into Sunday. A subtropical low coming from the south will also reach the Midwest about the same time this weekend, which is the source of all the moisture that is expected.
With models having difficulty in the short term, our confidence in the extended period is extremely low, but the forecast this afternoon sees more average precip potential through the mid-section of the country beyond this weekend and the first half of next week than was seen yesterday, while the southeast and the whole of the East Coast stay on the wetter side of normal. There's also notable model difference in the week two period in the southwest, where the EU is wet and the GFS sees just normal moisture potential.
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10-15 day temperature outlooks have removed the most extreme cold air this afternoon as it begins to retreat back to the north, but otherwise there was little change here as well this afternoon. Once temperatures fall off here over the next couple days, there continues to be good model agreement on cooler than normal air lingering for most of the country into the second week of December, while some warmer air looks to return to the western US and also across the Gulf.
Not a lot of change again for the forecast in South America this afternoon, as the models continue to be in fairly good agreement on rainfall continuing to favor northern and north-central Brazil generally through the week this week, before a system starts up in Argentina and brings moisture back to these areas and then works north back into southern Brazil.
The models have so far this week continued to pull this Argy system forward into the short term, but this will need to be monitored into the end of the week. We mentioned recently that there are dry pockets in southern Brazil and wet pockets in parts of Argentina, but overall, there continues to be little from a forecast standpoint that would cause notable adjustments in production across either of the two countries.
Noah Richardson
Topflight Grain Seymour
202 N Main Street, Seymour IL 61875
nrichardson@tfgrain.com
www.topflightgrain.com
