Written Commentary
MORNING COMMENTS
Geopolitics:
China’s President Xi Jinping sent a congratulatory message to former president Donald Trump that read the following: “A stable,healthy and sustainable China-US relationship is in the common interests of the two countries and expectations of the international community…It is hoped that the two sides will uphold the principles of mutual respect, peaceful coexistence and win-win cooperation, properly manage differences, expand mutually beneficial cooperation, and find a correct way for China and the United States to get along.” Today, China announced a five year stimulus package dedicated to fixing the “hidden” debt issue amongst the local governments. The package will total $1.4 trillion over 10 years. They also signaled more stimulus would come next year. The announcement was slightly underwhelming for the US equity market.
Macroeconomics:
Chinese October crude oil demand was down 2% from September and down 9% from last year. China is making efforts to improve their economy, but imports and consumption may take time to begin to improve. The US Federal Reserve made it clear yesterday there are still problem areas in the US economy including focus around our national debt. China owns $749 billion in US debt, making it the second largest foreign holder behind Japan at $1.13 trillion.
Ag Fundamentals:
The USDA WASDE report will be out today at 11:00am CST. Expecting the USDA to pull back on US and Brazilian bean production. September and October dryness took some air out the soybean yields and Brazil had some areas that planted late. Some estimates had bean yields below 53 bu/acre. Anything above 52 bushels would still be a record bean yield and slightly above the trend line. Corn usage should be higher along with export expectations, possibly as high as +100 million bushels to 2.425 billion bushels. This morning’s flash sales should offer even more optimism to the market. 8.9 million bushels of beans sold between china and unknown destinations and 7.9 million bushels of corn sold to unknown destinations.
Export & World News
This morning the US sold 107K MT of soybeans to China and 132K MT of soybeans to unknown destinations. Totaling almost 9 million bushels of beans. Additionally, the US sold 200,480 MT of corn to unknown destinations as well.
Malaysian palm oil futures were up 149 ringgit overnight, at 5101.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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