Morning Comments, November 09, 2020

Agriculture Cereals Corn 1242 Pixels Free To Use

Opening Calls:

Corn: steady to lower

Beans: 8 to 10 higher

Tomorrow at 11 AM, the USDA will release their latest WASDE report. Here are some pre-report estimates from the trade and previous info:

Corn Production (billions of bushels)

Average Estimate: 14.682

USDA Previous: 14.722

Last Year: 16.320

Corn Yield (bushels per acre)

Average Estimate: 177.9

USDA Previous: 178.4

Last Year: 167.5

2020/21 US Corn Ending Stocks (billions of bushels)

Average Estimate: 2.048

USDA Previous: 2.167

Last Year: 1.995

Soybean Production (billions of bushels)

Average Estimate: 4.246

USDA Previous: 4.268

Last Year: 3.552

Soybean Yield (bushels per acre)

Average Estimate: 51.6

USDA Previous: 51.9

Last Year: 47.4

2020/21 US Soybean Ending Stocks (millions of bushels)

Average Estimate: 233 

USDA Previous: 290

Last Year: 524

The corn market closed lower Friday on end-of-the-week profit-taking. However, there were several positives for the corn market including (1) the expectation that Black Sea corn production will be reduced in tomorrow’s WASDE report, (2) soil moisture deficits in Argentina, and (3) the fact that the US is offering the cheapest corn in the world. Corn is trading lower this morning following the wheat market lower rather than the soybean market higher. However, the corn market is in the middle of a demand-driven bull market, and expected weakness will be met with good buying.

The soybean market posted a mixed close Friday with the November and January contracts closing down 2 to 3 while all of the back months closed higher. For the week, things were positive for the soybean market with the front-month trading above the $11.00 level for the first time in 4 years and funds continuing to support the market based on strong export sales and increases in weather concerns in South America. Beans are trading higher this morning due to estimates that tomorrow’s WASDE will show supplies even tighter than the last report. Given the tightening supply of old crop soybeans and the potential for reductions in the new crop supplies in South America, any setbacks should be well supported.

This morning, there is also general optimism regarding an announcement from Pfizer about a coronavirus vaccine showing 90% effectiveness. This news had the Dow Jones trading more than 1,000 points higher in the overnight trade. There are some that think this could push the Board of Trade higher, especially soybeans. This is due to the old adage of “a rising tide lifts all boats”. We’ll see, but the comparison did not seem to be as true in the overnights of the Board of Trade’s action.

Please get offers in before 11 a.m. tomorrow (11/10/20) if you want to take advantage of a potential report spike.