Corn closed 3 cents lower in CZ and 2 cents lower in the following months. Lack of urgency in corn futures and balance sheets as well as long bean/short corn spreads allows funds to hold short positions just over 140,000 contracts without much worry. Next Tuesday’s S&D report is not expected to show many changes, with possibly a lowering of exports the only cause for concern. There are market expectations for export demand to improve December forward as Brazil export corn supplies dwindle and Argentine offers rise. Also, S. American production is far from made, and this may be enough to keep export projections unchanged in this report. Ending stocks are estimated to remain close to 1.9 bln. bu. in the report. Weekly export sales were unenthusiastic at 21.5 mln. bu. and bring YTD commitments to 575.4 mln. bu. vs. 1.053 bln. bu. last year. The only buyer of note was Japan.
Soybeans closed 6 cents higher but off session highs (+11) with plenty of moving parts. Funds were buyer of 7,000 contracts mid-day to cut into their estimated short position of 53,000 contracts. SBM rallying $5 helped support beans. The rally in SBM tied to a large Argentine crusher, Vicentin, unable to meet financial obligations and was forced out of some positions, which in turn may have been covered by Brazil as their SBM basis rose substantially. This in turn had traders thinking some SBM demand shifts to the U.S. The U.S./China trade issues remain murky at best. China has apparently run out of quotas to buy U.S. beans. An official from China mentioned negotiations are progressing, while China wants tariffs dropped before a deal can be completed, which doesn’t seem likely. Also, 245 tmt of beans were sold to an unknown destination (which traders will want to assume is China,) so plenty of balls in the air. Weekly export sales were 25.1 mln. bu. and bring YTD commitments to 953 mln. bu. vs. 881 mln. bu. last year. China the main buyer. Brazil weather remains good overall, but Argentina is starting to have a bit more concern over a dry weather trend. This bears watching as we proceed through December. Carryout for U.S. soybeans in the December report expected near unchanged at 476 mln. bu.
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