Good evening friends!
Corn 350’6 -6’6
Soybeans 976’0 -5’2
Chi Wheat 415’6 -4’4
KC Wheat 422’2 -3’0
Cotton 69.80 -1.30
Buy the rumor sell the fact was the theme of the day across the the CBOT and Cotton markets as prices retreated after fantastic export data was announced this morning. The strong dollar probably has something to do with it as ECB monetary policy remains easy. Janet Yellen has a problem and it is not unemployment or inflation, its Europe. The longer they stay with QE, the longer she needs to keep US rates low. Brazil cut rates today, but that currency rallied against USD. So while the strong dollar could be a problem, the competition currencies in Brazil and Russia are out pacing the dollar rally against the Euro and Pound. This negates the pressure seen from the Dollar Index.
This morning’s weekly export sale numbers were solid across the board, especially in soybeans. Soybean commitments through last week totaled 74 Mil, up 22 Mil from the previous week. . Corn reported a number near 40 Mil Bu, vs. 34 Mil a week ago and some 10 Mil above the pace needed to reach the USDA’s forecast. Corn is looking at really solid export demand here, which should support. The lack of competition from Brazil will help. Lastly, wheat sales totaled 19 Mil, up slightly from the previous week. Here is the bullish take away you need to keep in mind when buying breaks, the US has sold 886 Mil Bu of corn, up 89% from a year ago; 1,165 Mil Bu of soybeans, up 36%; and 567 Mil of wheat, up 27%. US export demand remains killer and should continue to be that way for the foreseeable future.
A quick reminder that November options expire tomorrow on the close in all of the markets we cover.
Cotton futures fell and closed below 70 cents for the first time this week. Dec 16 fell against Dec 17, there is now a carry between those contracts. Cotton news out of India is a little bearish as supplies there may not be as bad as recently thought. I remain bearish cotton and encourage anyone who has not rolled from Nov to Dec or beyond to get that done before tomorrow.
I expect some chop around the converging and crossing 100/200 day MA’s. Seasonal trends stay in tact for corn and beans through the next few weeks, but the last big harvest push lies ahead this weekend. The midday models have trended a bit drier next week and beyond, and so harvest should be wrapped up in the next couple of weeks in most locations. Then the focus turns to new crop. Better rain chances across N Brazil continue to be observed, with moisture expected in the next few days where it is needed. . Normal/above normal rainfall is then forecast across the whole of S America through Nov 5th, and the wet season looks to have arrived in Central/South Brazil. The NE remains dry, which is a red flag and will be monitored.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.