COMMENTARY 11/7/14**HAVE A SAFE HARVEST WEEKEND!

Lastnight brought a few light rain and snow showers across the eastern Midwest.  The 6-10 day forecast sees THE POLAR VORTEX bringing below normal temperatures accompanied with below normal moisture. Argentina was dry the past 24 hours and a good portion of Brazil received ¼ to ¾ of an inch.  The outlook for Argentina and Brazil the next 7-10 days continues to forecast average rainfall.

St Louis river levels DROPPING at +7.6 ft  and forecast to be 7.1 by 11/12.  Mile Marker 632 – 635 CLOSED this am to daylight traffic for up to 14 days.  the corps of Engineers is doing a matting project which was postponed until Dec but is now going forward.  This could be a giant wrinkle in an already taxed freight system during a record harvest.  It will slow loads moving south and empties moving north and cost a full tow as much as a 75 mile setback.  Stay tuned.

CORN      

DOWN 4         

Not a lot of news ahead of Monday’s report other than the idea for a slight bump in crop size (see below)  Export demand is weak, considering that we have the biggest crop in history.  Even Thursday’s Export Sales were weak at 18.8 million vs expectations of 24-31 with  23.1/wk needed. <- (Fundamental!) The China corn crop may not be quite as large as forecast as the drought in Henan is likely to contribute to a 3.6% decline to 210.6 MMT according to recent survey by SGS.  The USDA has the crop down 1.5 MMT to 217 mbu.  The FAO sees world grain crop down 3.7 MMT from a year ago due mostly to a smaller Chinese corn crop.  The BA Exchange maintains Argentine corn area is 37% planted and 3 million hectare area forecast.  Bloomberg Trader Bias:  Friendly, 13%  TW (30% LW); Bearish, 80% (57%); Neutral, 7% (13%).

Keep in mind that the market has moved nearly 50 cents higher during October on no real change in fundamentals.  Monday’s Export Inspections were light at only 16.8 mbu vs expectations of 29-35 with 34.4/week needed.  <-This IS fundamental.  Don’t allow Fund buying to make you too bullish, preventing you from making PROFITABLE sales.  One should look to improve upon existing sales.  (Lock in some of these higher values for Nov, Dec, Jan, Feb, & Mar). This is a great time to make up for not having much sold prior to harvest.!  One might also have offers in to take advantage of a higher board, should one materialize.

Here are the guestimates for the Nov 10th USDA report.

************USDA                PRIVATE            LINN               INFORMA            STONE

OCT         174.2/14.5          180/14.7              /14.9                176.4/14.4          178.4/14.96

NOV          ?????           175.7/14.6          /14.8              174.4/14.5       178/14.8

CEPEA (Brazil) reports domestic corn prices (near Campinas) are above the port values on strong domestic demand from the hog and poultry sectors.  They expect the  1st crop Parana corn area down 19% from a year ago.  Morgan Stanley expects Brazil corn area to fall 6% this year as soybean planting progress lags.  Argentina’s corn area is highly uncertain as some expect it down 12-20% as costs rise (USDA:  4.4% less area than LY).  Cordonnier trimmed their production forecast 1 million to 21.0 MMT from impact that inputs have on yield.

Last Monday’s Crop Progress report   US HARVESTED 65% TW, 46% LW, 71% LY%, and 73% AVG.  The State of IL HARVESTED 77% TW, 59% LW, 82% LY, and 78% AVG.

 

BEANS     

UP 8   

Higher on great Export demand and the slow pace of Brazil planting.  Soymeal demand is still a big mover.  Yesterday, big numbers for Export Sales— HUGE at 59.2!!  Expectations were 33-40.  On the other hand, bean meal got whacked with 306 K MT Unknown cancellations….confirming the rumors that the cancellation were true and sales are likely switching to SA.  Bean meal ended up at 124 K was towards the lower end of the 100-250 K expected range.  Reading between the lines….. the meal # was still better than the trade was expecting.  According to Reuters, Argentine Grain Inspectors are planning a national strike mid week, which could interrupt exports. These inspectors are workers that check the quality of grain before they are loaded on vessels.  Bloomberg Trader Bias:  Friendly, 6% (38% LW); Bearish, 69% (46%); Neutral, 25% (16%)

Below are some of the estimates of the Privates for the next USDA Report out Nov 10th.

**********USDA              PRIVATE         LINN             INFORMA            STONE

OCT         47.1/3.93            47.2/3.97            /4.09               48.5/4.02            48.4/4.07

NOV        ?????              47.7/3.98         /4.06             47.9/3.99          48.4/4.03

 

Last Monday’s   US BEANS HARVESTED 83% TW, 70 %LW, 85% LY, and 83% AVG.  IL HARVESTED 83% THIS WEEK, 63% LW, 91% LY 84% AVG.

 

WHEAT          

DOWN 6

Fund selling again.  Cheaper until we find a price level where we generate some demand.  Weak export sales Thursday’s and the US dollar continues to move higher.  Export Sales were only 9.8 mbu vs 12-19 expected and 12 per week needed.  Continued poor export demand, and weakness in foreign currency continue to create concerns about the producer’s ability to secure needed inputs for 2015 spring wheat planting as well as coarse grains.  Egypt’s Supply Minister Hanafy says 3.4 MMT in wheat reserves are sufficient to meet domestic demand through through the end of March.  Nearly 6% of Romania’s wheat crop has been destroyed by a giant outbreak of wild mice!  This creates a problem that in the world of marketing we call, LONG MICE/SHORT CATS.  Bloomberg Trader Bias:  Friendly, 7% ; Bearish, 71%; Neutral, 21%

Last Monday’s Crop Conditions Report had US Winter Wheat CONDITIONS  59% G/E THIS WEEK,  59% LW, and 63% LY.  STATE OF IL CONDITIONS 64% G/E this week, and 69% LW. US WINTER WHEAT PLANTED 90% TW, 84% LW, 90% LY, and 89% AVG.  THE STATE OF IL WINTER WHEAT PLANTED 69% TW, 41% LW, 94% LY, and 83% AVG.  US WINTER WHEAT EMERGED 77% TW, 67% LW, 76% LY, and 72% AVG.  THE STATE OF IL EMERGED 36% TW, 18% LW, 71% LY, and 62%AVG.