Good morning friends!
Corn 346’4 (-1’2)
Soybeans 952’4 (-4’4)
Chi Wheat 407’2 (+2’2)
KC Wheat 416’4 (+1’2)
Cotton 67.67 (-.20)
**I was having audio problems this morning so there will be no audio this morning.
It has been another slow night of trading on the CBOT. The market awaits the USDA weekly export sales this morning and preps for of active harvest progress in the Eastern and Central Midwest, even as rains fall across much of the Midwest at this moment. .I imagine farmers will make magnificent progress over the next 10 days. The current news flow that has pushed cotton around is the Hurricane Matthew story, the storm will make landfall in Eastern Florida over the coming days. The storm is life threatening and clients should evacuate. This kind of stuff takes me back to my Navy days when I was stationed at Little Creek near VA beach. Anytime a hurricane came, I was headed out to sea. I hope everyone who has to evacuate is doing so safely.
The storm is expected to track north/northeast along the SE US e producing damage as far north as North Carolina but it looks like a lot of the cotton ground will be spared. The track of the storm looks to be moving west after it moves out of Florida. I assume we will hear of abundant moisture reports. The US news media will be focusing all of their attention in the coming days on this dangerous hurricane.
IN corn, I am starting to hear some rumblings that the moisture levels in Brazil are very, very short for this time of the year. These are reasons why it probably pays to have some longer dated out of the money call premium on the books. Right now the market doesn’t seem to care, but supplies in Brazil and Argentina will be tight over the coming months. Its been a good while since a weather threat got follow thru and affected yields, if it happens in Brazil the US supplies will be leaned on further.
Here is some marginally bullish wheat news, the EU announced that it would propose to increase the tonnages of duty free wheat and corn that could be imported. Currently, the EU can annually import 950,000 MTs of wheat and 400,000 MTs of corn without duty. The proposal is to increase imports by 1 million metric tons each to help rebuild domestic grain supply. An approval of the additional imports without duty is expected. Any news like this is something that should be thought of when looking to buy on breaks. Right now we have two of the larger corn producers in the world with lack luster supplies.
USDA exports are out at 730 am, look for traders to get positioned ahead of the USDA WASDE in coming days. I think the preparations will be with a bearish bean report in mind. Other than exports, the news-flow will be dictated by macro reports to end the week.
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