Good morning friends!

Corn 338’2 (+1’2)

Soybeans 946’0 (+’2)

Chi Wheat 401’6 (+5’0)

KC Wheat 402’4 (+4’0)

Cotton 68.69 (+-.30)

Good morning friends!

Overnight price action was quiet all night, until a few minutes ago when the wheat markets poked their heads back above 400 in December contracts. Exports are delayed until tomorrow because of Monday’s holiday.

Check out this read from Chris Clayton at DTN on Winter Wheat woes.  It sounds like the US Producer needs 60 bpa to turn a profit at these price levels.  You all know my thoughts on wheat (if you don’t the stat below will help clarify. LINK

I think this open interest statistic says it all when it comes to current wheat conditions. H/t to @morrisonmkts on Twitter.:

Futures short open interest as a % of 2016 U.S production: Corn 44%, Soybeans 77%, soft wheat (W) 696% 

The specs are basically short the size of three crops right now.

Egypt back to the tender window for wheat for early November. It’s expected that Egypt will go to Russian wheat for supply.  Egypt has a problem in aquiring dollars which will keep them away from the US. Egypt has been active booking a host of commodities including rice and edible oils as currency devaluation looms on the horizon. Algeria is also seeking world wheat that is likely to include the purchase of French or US gulf wheat. The Algerian tender should give us a look as the availability of quality milling wheat from France.We have seen FOB prices converge of late as US prices are falling and Russian prices rising.

I look for short covering today as people realize the report from yesterday changed the story little.  Wheat pressure comes from delivery in my opinion which is still weeks away.  Here in Chicago, it feels like fall has arrived.  Northern parts around here might have gotten a frost last night.  Bean harvest probably slows into the weekend.  I remain bullish of corn and wheat, bearish/neutral of soybeans and bearish of cotton. Cotton is being bid up on potential Chinese demand that I am skeptical of.  Roll nov puts into Dec if you can’t move product through the mills at this point.