Lack of fresh or compelling news overnight leaves markets limp once again. At 0630 CH19 off a ¼ cent at $3.79 ¾ with SH19 giving up $0.01 ½ at $9.20 ¼. Volume under 10K on each. Chi and KC wheat $0.04 ¼ lower in early trade.
Trump quote - "We are now making it clear to China that after years of targeting our industries and stealing our intellectual property, the theft of American jobs and wealth has come to an end.
SHSK traded out to 14 ¼ yesterday. Delivery values not even remotely close to working. First notice day on the SH19 in three weeks with 1,113 lots registered for delivery as of this morning.
Weekly ethanol production took a nosedive last week.
Current US soy stocks use ratio is near .23 as of the most recent USDA report and implies Futures grossly overvalued. Cut that ratio in half and it would justify futures in the current area. Fast forward to next year and a look at SH20 futures trading near $9.80? Assume we do cut the ratio in half next year. SH20 near 60 cents overvalued even if we cut the ratio in half?
Quick cursory look at new crop soybean hedges this date vs a year ago shows an average position 17% of a year ago this date. Interesting range from as high as 37% to a low of near zero. Throw those two out and the data shows 15%.
USDA reports tomorrow with trade focused on final yields with the majority expecting a decline. Stocks data also potentially impacting as we have seen in years past. Brazil production estimate also looms large.
Weekly export sales report later this morning.
Markets hungry for news and sideways action has markets primed for a significant move. As always stay open minded heading into the data dump tomorrow.