Futures are trading lower in corn and soybeans with the Democrats seizing the House of Representatives, while the Republicans held onto the Senate in the Mid-Term Elections. Ultimately, little changed with the outcome of the election other than the White House now has to face a new hurdle in order to pass any legislation. The President still essentially holds the reigns in the renegotiating of the trade policies with China and has broad powers to cut and approve deals.
Look for traders to quickly turn their attention to tomorrow mornings USDA S&D report. Traders want to be long of corn/wheat and short of soybeans into the actual numbers. It wouldn’t be too big of a surprise to see a cut to 2018 production a little, though any reduction in yields could easily be offset by weaker demand. Ethanol production has been slow as the industry struggles with poor margins.
Tomorrow’s report will be the last yield and production update until the final in January. I would advise producers with any bushels that need to be sold between now and January to take off some risk today before tomorrow’s report. While the private analysts are expecting a lower yield tomorrow, we all know that these reports have been known to throw us a curveball!
Have a Safe Day!