Good morning friends!

Corn  352’4  -2’2

Soybeans  1010’2  -1’4

Chi Wheat   413’6  -2’4

KC Wheat 413’6   -2’4,

Cotton  68.61  -.25

 

 

Grain markets are following the crude markets lower we see continued selling in that market. Crude oil is off almost 6% in the last 3 sessions. Little has changed in overseas markets as the USD against popular pairs remain sideways.  I expect those markets to pick up price action as the Presidential election approaches, bleed over into the grain space should be expected.  Today will be slow regarding news flow.  I expect the headlines to be macro driven until USDA next week.  Seasonals all point lower between now and Thanksgiving.

Last night we would have gotten announcements for November bean deliveries, none were announced. The lack of  soybean deliveries is a supportive as we witness weak cash basis levels combined with a complete blowout in front month spreads.The price action in beans makes little sense to me right now. We are seeing buying in the deferred contracts unlike I have seen before. This is supportive for soybeans and bullish for outside markets that compete for space with them. The longer Nov stays at 10.00 the better shot we have for Dec 17 corn to trade +4.00.

We just finished October trading, I mentioned the returns yesterday.  IT was the first time in a while I remember all of the markets we follow having positive performance. Weather may be one of the reasons. The January to October period is the 2nd warmest on record going back to 1895 (THANKS NWS) and clearly the warm temps look to persist throughout the 1st half of November. Limited precipitation will be noted and soil moisture deficits are growing in the southern, specifically the south western part of the growing region.  Be on the lookout for weather problems, especially in wheat. The lack of moisture is positive for cotton at this juncture with harvest progressing.  It sounds like the delay in harvest in Texas we saw last year wont be duplicated.

So far so good with South American weather. Part of me harkens back to 2012 when we seeded quickly like the Brazillians did this year. The trade can fall into a lull that all is well because of quick plantings, but then when heat comes the lack of soil moisture shows itself. We are facing that scenario in N. Brazil, now all we need to see is heat.