Closing Markets: Corn: -6.50.
Beans: -26.75. Wheat: -19.25.
Good evening!
Market Recap-
Ag markets were under heavy selling pressure pretty much from the word go on Thursday, with soybeans leading the space to precipitous declines throughout the session on a mix of what was likely profit taking and disappointment that there is still no confirmation from the Chinese side on any of the trade agreements talked about in recent days now almost a week after the fact. Traders are debating whether the Chinese are slow-playing the Supreme Court case to see what happens there for before taking any steps towards last week's agreements or if the lack of commitment is signaling a broader intent to continue shunning imports from the US. As we've said before, China can say what they want, but it's what they do that the market will continue to be concerned with.
Corn Summary-
Selling across the ag space didn't discriminate on Thursday, as lower to sharply lower price action was across mostly the whole of the CBOT. Like the sharp up days in recent weeks, we don't have a lot of explanation for today's decline other than profit taking and the idea that prices maybe just ran too far, too fast on the headlines in the soy space. At the end of the day, ending stocks north of 2.0 bil bu don't argue for spot futures to be anywhere near $5 and this is maybe as good an explanation as any for the sudden shift in mood. That said, its also worth noting that the selling through the day didn't press the market to new lows for the week, which could be pointed to as maybe the one positive for the session. This level, at 4.27 3/4, will be the line in the sand for the bull camp going into the weekend tomorrow.
Soybean Summary-
It was an ugly day in the soy complex on Thursday, with beans and meal seeing sharply lower price action that pressed both markets to new lows for the week. Like we mentioned in our corn comments, there isn't really anything specific to point to for the sudden change in direction from Wednesday, but with the sheer amount of unknown that continues to be present in the space, we would note that these large, wide-ranging swings with little justification will likely be more common in the weeks/months ahead. The same themes otherwise also apply here; profit taking following more than a dollar run-up over the past month is not surprising, and with little new on a known basis regarding exports or ending stocks on the balance sheet, prices here likely also went a little too far, too fast.
Wheat Summary-
While beans and meal got the most fanfare throughout the day, the wheat market was actually the downside leader on a percentage basis, with spot Chicago futures shedding nearly 3.5% of their value during the session. Here too, profit taking was noted as one of the main drivers of the lower action, with there also being ideas that most of the recent rally was the result of fund short-covering that has possibly now dried up as they get their position closer to net-even, or at least not as short as they had been throughout most of the back half of summer and into fall. Otherwise, there's still not a lot new on the global side of things that could be pointed to as reason for the Thursday sell-off, with US values still mostly above those from other major world exporters.
Outside News Headlines-
Crude oil futures up $0.05+/bbl.
Weather Updates-
Weather across the Midwest will be like previous days this week for another 24-48 hours, before cooler air and light precip begin to move in the from the west Saturday and into Sunday. On the precip side, just light/scattered rainfall is expected for the eastern part of region Friday into Saturday, with cooling temps then leading to snowfall potential for parts of northern IL and IN Saturday into Sunday.
Temperature-wise, daytime highs will go from the 60's/70's across a lot of the Midwest tomorrow to the 30's/40's by Sunday and into the first part of next week, as the first real shot of cold arctic air for the season hits the Midwest. However, forecasts don't see an extended period of cool temps emerging, with highs back into the 50's/60's again for the a lot of the area by the middle of next week.
Beyond this weekend's rain/snow events, models see drier conditions returning again through the week next week for most of the US besides the West Coast, with high pressure continuing to limit storm activity for the most part. Week two precip maps see a similar pattern and are wetter through the western quarter of the US, while seeing average to slightly above average precip chances across the northern border with Canada and then into the Great Lakes area.
Temperature forecasts beyond next week are warm for the eastern US into the back half of November, and are especially warm through TX/LA and the south-central part of the country. The west meanwhile looks to shift back cooler, though the coldest air for now looks to stay further north up the Canadian Coast and into Alaska.
Mid-day weather models are drier through Argentina through the rest of the week and into the weekend, but still see rains for the western half of the country, while heavier rains are then still seen falling through RGDS in far southern Brazil Friday night into Saturday. Better rains then fill in through central and northern Brazil through the week next week, and also look to fill in for some of the more southern regions of Argentina that will see lighter totals the next few days.
Same story on the temperature front still, with there really being nothing notable to speak of for Brazil, while Argentina continues to see below average daytime highs for the most part over the next week but does not see the first chances in the southeast now that had been present in previous model runs this week.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
