Morning Grain Comments, 11/02/2015

Monday, November 2, 2015

Mixed/weaker start to a new month.  Fresh news limited.  ....But at least we got an extra hour of sleep. 


Morning Humor


Market Drivers:

· FCStone Nov Crop Survey released this afternoon.

· World weather generally leans negative. 

· Tight farmer holding of grain supplies/firming cash markets.

Recap & Soap Box

Mixed/lower market action in moderate volume totals.  Dollar slightly weaker; outsides generally all in the red.  Minimal macro fundamental updates to start the week.  .  There were 90 contracts of beans delivered overnight, almost bringing intent date current (10/29/15).  CFTC report Friday showed minimal surprises versus expectations.  FCStone November Crop Survey released this afternoon; other privates following soon.  USDA Nov WASDE on the 10th; market expecting slightly higher production.  Traders rapidly closing the door on production discussions, and starting to trade demand and light farmer selling.  Big picture ebb and flow will be dominated by "big supplies" versus "dissatisfied producers" debates all year; if you like sideways trends, this market is for you.

Despite the sideways markets, it is surprising to see the counter-seasonal action going on between the three main grain markets.  We are in the midst of a "buy soybeans, sell everything else" time of year, and this has not performed well at all recently.  Chart below shows beans as the weakest, corn as the middle, and wheat is the atypical leader.  Weather concerns and short covering have helped wheat, strong cash has helped corn, and limited weather threats in South America have prevented beans from firming.     


World weather leans slightly negative.  Argentina trending toward a pattern change and should improve the moisture situation.  Brazil will see additional rains across the north central/northwest.  Smaller crop areas in the Northeast remain dry, however.  US Plains saw good precip this past weekend, helping to improve conditions; drier weather near term.  FSU wheat regions heading into dormancy in less than ideal conditions.  Wheat is the market that is most sensitive to weather at this time.

Crop Progress tonight expected near 90% on beans and 85% on corn.  Dry stretch of weather near term should allow harvest to wrap up what is left.  On this side of harvest, traders largely disappointed with amount of farmer selling that has taken place.  Having said that, many would be surprised to know that my proprietary data suggests a relatively "normal" amount of producer selling over the past six weeks, although it is admittedly skewed to the Northwest Corn Belt.  Cash levels starting to rise aggressively, particularly in the ECB, and also particularly on corn.  NWCB corn values working into the ECB; Brazilian corn working into the US Southeast....all show that the cash market is more a function of "supply location" rather than "supply quantity" right now.

Unless otherwise noted, the posts on this blog should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by INTL FCStone Inc. or its subsidiaries. INTL FCStone Inc. is not responsible for any trading decisions taken by persons viewing this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by INTL FCStone Inc. or its subsidiaries. Reproduction without authorization is prohibited. All rights reserved.

Market Intelligence Free Trial

Meet the Team

Kansas City, MO
1251 NW Briarcliff Parkway
Suite 800
Kansas City, MO 64116
Tel:+1 (816) 410-5079



Our privacy policy has changed. View our privacy policy to learn more.