Blogging by the Bushel
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Market Report

Wednesday October 31st, 2018

December closed down 1 ½ at $3.63 ¼ and March 19 closed down 1 ½ at $3.75 ¾. January beans closed up 4 ¾ at $8.51 ¾ and March 19 closed up 4 ½ at $8.65. December wheat closed up ¾ at $5.00 ½ and July 19 closed down 2 ½ at $5.34. Crude oil closed down $.90 at $66.31.

The corn market has been nothing if not consistent this week.  Corn down-ticked again today. Volumes have been quietly inching higher throughout the week, though ranges and excitement remain muted. Managed Money traders were viewed small net sellers for a third day and will head into tonight net short an estimated 50,000 combined futures and options.

In truth, it was a very quiet news day. Harvest remains full throttle in the western Corn Belt, while those in the East are rained out. The balance of the week promises more of the same.  After that, the weather becomes a little more mixed. It will be interesting to see the harvest mix in Monday’s weekly report, as the 6-10 day map leans wet and the first half of November is starting to look a little chilly again, which reduces evaporation rates. The weekly export sales report in the morning is expected to be another rather depressing affair. There were no announced daily sales over the report timing, the Dollar has firmed, and both South American and Ukrainian sellers have become more aggressive.

The soybean market began the day under pressure but rallied back for a reversal trade driven by technical short covering in an otherwise quiet Halloween session. There was a technical component to today’s bounce as well. The daily bean charts had become oversold after the two-week break off the recovery highs and in the process.Meal bounced back with front month Dec respecting its lows against this $300 area once again. In the currency trade, the Dollar index extended its rally into new highs and fund selling seemed mostly concentrated in wheat.   The dollar index is extremely overbought and due for a correction and when that happens, it should take some of the sell pressure away. With the start of a new month tomorrow, money flows in/out of commodities could be more pronounced than normal.

Another quiet news night, and another session in which prices were lower, that is until the end of the day. Much of the overnight weakness came in the hour leading up to the morning pause. A late morning run in beans and meal helped take wheat futures off its lows, but until the end of the day, values were mired in a mostly lower trading range.

Over the past few days, trade seems to have been focused on World wheat prices lower week over week, Bangladesh and Jordan passing on their recent tenders citing too high of offers and what was next for the US export program. But, what ignited the late run? Early in the session when Chicago Dec was trading on its lows at around $4.90, it was said that at that point US SRW wheat was once again the cheapest wheat in the World, and we have seen before that when US wheat becomes that cheap, it generates business. Did not hear of any wheat business, but that does not mean there wasn’t any. Also, as we moved through a quiet news day, talk started to once again surface about the quality of the Aussie wheat crop. Those reports coming out on the early stages of the Australian wheat harvest were not very encouraging.

Anna Kaverman

anna@mercerlandmark.com

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