November 12, 2019

Good Morning,

Overnight corn and beans were unchanged after yesterday’s selloff of 14 cents in soybeans and 4 cents in corn. The markets were under heaving fund selling yesterday with traders monitoring comments from President Trump. The markets closed at their lowest level since the September stock report. The USDA’s November report removed most any chance of bullish surprises with acreage and yield. One bit of hope to hang on to is the correlation to the direction of the Oct-Nov yield change compared to the Nov-Jan yield change. (chart below)The problem with this is that we need to wait two months for the data and it may be too late for the market to react. Once we get into January the trade will start to focus on the coming years acres and production instead of what is behind us. With ta 167 bpa yield and planted acres at 94 million, next years carryout looks to be right in line with this years at 1.906 billion bushels. Keep in mind this is using a 167 bpa, which is what we are using this year with poor growing conditions. The more this increases, the less likely we are to see this corn market at the current levels next year.
I would advise producers to take advantage of historically strong basis levels for the crop they are harvesting now and start to lock in some of next years production at current cash levels.

NASS crop progress will be out later today with expectations for corn harvest to be 65% complete and soybean harvest 85% complete. Drying issues continue with the shortage of LP and the crop not drying down much in the field with later planted varieties. This reminds me of 2009 only on a larger scale when harvest drug into December.

The trade will be awaiting President Trump’s update on the Phase 1 deal with China later today.(11am central) My guess is that he would be positive about the trade deal, but not commit to anything. Any negative comments from the President today could be volatile to the markets.

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Have a Safe Day!

Garry Gard