Good afternoon friends!
Corn 340’6 -13’4
Soybeans 991’0 -20’2
Chi Wheat 406’6 -8’4
KC Wheat 410’2 -7’2
Cotton 68.29 -.46
WASDE was released this afternoon amidst a rally in the commodity markets (have you seen copper?) and was taken as bearish by the trade in corn, beans and cotton. Wheat did not have much new data.
Corn yields were raised across much of the belt which blows my mind as we saw upward adjustments in ND and MN. Illinois came in above 200 bpa , 7 bpa over where we saw 2014 records set. This is confusing for me as no one i work with in central illinois came in near 2014 yields. Regardless, corn came off but there was a silver lining in higher demand to offset supply increases.
Soybean yield at 52.5 is a new record and some 14% above the 30-year trend, and this deviation from trend is something that hasn’t been seen since 1994. We saw a major increases in bean yields from Oct to November along the I-90 line. Beans also saw a small crush decrease which increased supply by almost 75 million bushels. This should be very negative to bean prices in coming weeks, i would look for a retest of recent lows.
Global corn and soybean stocks were lifted slightly, mostly to account for higher US ending stocks. South American corn and soybean production was left unchanged, and major exporters’ corn stocks were not changed. Slightly higher production is offset by better demand, much like in the US balance sheet.
Cotton demand was left unchanged but we saw production hiked above 16 million bales. Harvest remains slow out west and the prices held today, which is a good sign for forward price action. I remain bearish though based off a heavy long COT report. At some point liquidation risk will come to the surface.
I mentioned copper earlier. Between that and the stock market, bulls should feel OK about the Trump election. The money in the US treasury market will go somewhere, my bet is some of it goes to commodities. I remain a buyer of corn and wheat on breaks and a seller of cotton and soybeans (new crop).
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