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Closing Comments

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Closing Comments

Commitment of Traders report has been delayed to Monday due to this week’s federal holiday.
USDA Farm Service November 2015 Corn Prevent Plant Acreage: 2.366 mln acres compared to October 2.362 mln acres. USDA Farm Service November Soybeans 2015 Prevent Plant Acreage: 2.231 mln acres compared to October 2.227 mln acres. USDA Farm Service November Wheat 2015 Prevent Plant Acreage: .697 mln acres compared to October .697.
The current new crop bean/corn ratio sits at 2.24 which would favor more corn acres at the expense of soybeans.
Informa Economics forecasting 2016 US corn planting acreage at 90.1 mln acres vs. previous 90.8 mln. Soybeans at planting acreage at 85.3 mln acres vs. previous 83.9. US winter wheat at 38.7 mln acres.

Corn

Respecting the USDA report low for now

The recent drop in corn prices has helped to narrow the gap between the US and Brazil on export business, but Brazil still holds a slight edge particularly for spot ship. New net sales of 24.5 mln bushels were toward the high end of expectations, and 17% better than the four week average.
Industry sources in China say the National Development and Reform Commission is proposing to cut China corn plantings by a fifth with a target of 175 mmt by 2020. This 20% reduction in acres is designed to reduce the government’s increasingly large stock piles of corn by easing available supply.
For the near term, support for corn will be at the low of the USDA report of 3.56.

Soybeans

Strengthening dollar and decent weather forecast for the Southern Hemisphere made it hard for beans to rally today.

Brazil forecast looks like the rains and cooler weather pushed back a few days but extended forecast still calls for wetter and cooler pattern in the North and West Central areas of the country. AgRural estimated the 15/16 Brazil soybean planting progress at 60% complete, up from last week’s 47%, but behind the 71% long term average for the period. Parana state soybean planting was estimated at 84% complete vs. last week 75%. Mato Grosso planting progress was 77% complete vs. last week 60%.

NOPA October crush will be released on Monday. Average estimate is 163.4 mb verses last year’s 157.9 mb. Soybean oil stocks are also expected to rise just over 90 million pounds from Septembers numbers.
Soybean basis bids at the Gulf firmed up a penny to +.70, Decatur held steady at +.20 over January.

Wheat

Cash traders said some 550,000 mt of option origin milling grade wheat was purchased by Algeria. Average price was reported around $205/mt and for shipment in January 2016.
The December KC-Chi wheat spread rebounded today, closing at -.30 ¼.
The top executive at South Dakota’s state run flour mill says the facilities $27 mln expansion plan has kicked off and expects completion by the 2016 summer. The expansion is expected to push the facilities 3.8 mln daily production up by 30%, and once completed it would be the nation’s largest single mill plant in the U.S.

Livestock

Livestock follow the grains to end the week at the lower end of the range.

After a nice mid-week recovery, gains were given back in both the cattle and hog complex. Hogs finished will of their lows, but cattle struggled later into the day. Early action next week will set the tone for either a bounce or new lows.

Closing Market Snapshot

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All opinions expressed in this commentary are solely those of Water Street Advisory. This data and these comments are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. There is significant risk of loss involved in commodity futures and options trading and may not be suitable for all investors.

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