US/China trade rhetoric is like a yo-yo – up & down – good & bad – and the mkt has appropriately reflected that during the month of Oct – staying range-bound as the above chart indicates! Coupled with that is the crop uncertainty due to the late planting – where actual production & yield probably won’t be known until the Jan USDA Report!
FACTORS IMPACTING THE MKT
- EXPORTS – Thur Sales were 549,000 (300-800) & Mon inspections were 380,000 (450-650) 135,000 mt Meal – Phillipines, 132,000 mt Beans – Unk, 132,000 mt Beans – China
- HARVEST PROGRESS – Corn is 41% in (lw-30 avg – 61) Ill – 54 (80) Ind – 48 (66) Iowa – 26 (53) good/excellent – 48% (46) maturity – 41% (61)
- NOV CROP REPORT – FRI – 11/8/19 – all eyes will be anxiously awaiting the USDA’s latest estimates – this will be the final report for 2019 with final #’s due out in Jan 2020 – Informa’s predictions – just out today – reflect a little higher #’s – yield – 168.6 (USDA – 168.4) production – 3.553 (USDA – 3.550)
- US/CHINA TRADE TALKS – It seems, every other day, headlines come out that refute the previous day’s news – Phase 1 is scheduled to be signed in Mid-Nov in Chile – then the venue is scratched due to civil war – & they’re looking for a new place – then China says they may not sign any additional trade deals after Phase 1 due to the inconsistent nature of the Trump administration – so who knows – our bet is eventually a deal will happen because both sides need it – regardless of the “posturing”
- HISTORICALLY CHEAP – Corn prices are in the lower 20% of a 10 year range ($3-$8) – as we mentioned in our last letter – so a lot of supply/demand bearishness is already dialed in
- EARLY HARVEST LOWS – were scored in early Sept and validated by a $.50 rally (352-402) since then!
We feel the “down” has clearly been removed from the equation – and that leaves “sideways or up”! The later option should prevail – especially with a successful trade resolution!!
Nov Beans have managed a $.90 rally (845-945) since early Sept off the US/China trade optimism & an improving export picture! Just today the 10am grain inspections showed a robust 1.5 MMT & last week there were frequent 8am sales announcements! The mkt will sideways trade this week in front of harvest progress estimates today & the Nov USDA on Fri!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon inspections were 1,480,000 (850-1,500) & Thur inspections were 943,000 (500-1,100)
- US/CHINA TRADE DEAL – the latest scuttlebutt has the Phase One signing between the trading behemoths occurring in Iowa sometime in Nov!
- HARVEST PROGRESS – beans are 62% in (lw-46 avg – 78)) Ill – 96% (avg – 100) Ind – 96% (avg-100) Iowa – 97 (avg – 100)
- USDA NOV CROP REPORT – FRI – 11/8 – #’s are expected to be close to Oct Yield – Oct USDA – 46.9 FC Stone – 47.5 Informa – 47.0 Prod – Oct USDA – 3.550 FC Stone – 3.570 Informa – 3.553
A trade deal (Phase One) should soon be signed & harvest pressure will soon be past the Mid-point – two positives furthering an up mkt!
Egypt tendered for 235,000 MT of wht – so far they have bought 3.605 MMT with 50% from Russia – 21% from Ukraine – 20% from Romania & 8% from France! The mkt will closely monitor the USDA Report on Friday – as well as the mkt action in corn & beans for directional clues!
This stalwart bull mkt keeps threatening to top out – as it is extremely overbought and is at a big premium to cash – but strong cash & beef keep it afloat – however, expected strong placements in Oct due to be reflected in the Nov COF on 11/22 may finally do the trick!
While Dec Cat is threatening to put in a top, Dec Hogs are on the other side of the spectrum – toying with establishing a low as near-record production – week to week & a jump in avg weight last week – has staved off the promise of future exports from China once the trade deal is finalized and kept Dec Hogs under continuous pressure!
141 W. Jackson Blvd. Suite 1920 Chicago, IL 60604 | (800) 769-7021 | (855) 264-6673 (Direct) | www.pricegroup.com
A Subsidiary of Price Holdings, Inc. – an Employee Owned Diversified Financial Services Firm. Orders must be entered via direct verbal communication with a representative of our firm. We cannot be held responsible for orders left in any other manner. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Investing in futures can involve substantial risk & is not for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses. Member NIBA, NFA.
The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The PRICE Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author.
To SUBSCRIBE to the AGMASTER please go to http://bit.ly/xIGR6x.
To Unsubscribe from the AGMASTER please send an email to email@example.com.
View the AGMASTER Archives at http://blog.pricegroup.com/tag/agmaster.