November 19, 2018
Early Market Talk 9.14.2018
September 14, 2018

Early Market Talk

BRUCE NELSON • SEPTEMBER 14, 2018


At 0630 CZ18 $0.01 ¼ higher at $3.51 ¾ on volume of 13K contracts. SX18 up
$0.03 ½ at $8.36 ½ on vol of 7K. KC and Chi wheat $0.07 higher.

Dow futures 44 points higher overnight taking out the late August highs and set
to challenge the all-time high set in January at 26,684.

Rosario Grain Exchange has Argentine soy production for 18/19 at 50 mmt.
USDA has them at 57. This past year’s drought reduced crop was 37.8 mmt.

Yesterday we sent a link that discussed how USDA was calculating the soybean
payment for the impact of tariffs Included again here.
https://www.usda.gov/oce/trade/USDA_Trade_Methodology_Report.pdf

Interesting that CZ18 is nearly the identical price of a year ago this date. The
carryout to use ratio today is 11.7 compared to 16.3 last year. Something has
yet to get worked out. Price /demand/crop size.

Current stocks use implies CZ18 price significantly undervalued or the yield is
bigger yet? 2004 comes to mind as the last time we saw a big deviation on the
positive side from trend.

Argentine weather getting a look with the next few weeks increasing with
importance. Our lead weather forecaster looking at some analogous years that
would lead them to conclude drier weather and perhaps planting concerns.

Corn / soy acreage mix for next year getting more attention. Are we getting the
incentive to get more corn acres?

China sold 1.03 mmt of corn from state reserves which represented 26% of the
total offered.

CFTC data this afternoon will not catch the estimated heavy selling Wednesday.
Have to wait for next week’s report to see that data. Funds estimated net short
126K corn.



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