Early Market Talk December 19, 2019

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Will 19 ½¢ be all we get out of the corn market? CH20 giving up 3 ½¢ yesterday and another 1¢ overnight. Soybeans have rallied 63 ½¢ off its December 2nd low closing near unchanged yesterday and giving up $0.05 ¼ overnight. Or, as the old saying goes, “Bull markets always let you in”.

At 0600 CH20 trading $3.86 with SF20 $9.23 ¼. Both on typical overnight volume of 12 and 10K contracts. Chi and KC wheat reversing yesterday’s losses trading 4¢ higher this morning.

Corn open interest down 9K contracts yesterday and the biggest daily drop in OI since the rally started. Volume remains dismal at only 208K contracts trading yesterday. Soy volume yesterday at 218K with OI off 9K.

Best guess on Fund position has them remaining net short 90K contracts of corn and 84K contracts of soybeans. CFTC data Friday will update through Tuesday. With little change in OI, might be surprised on Fund net short change?

CHCK at 6 ½¢ is only 35% of Full carry. SHSK at 13 ½¢ is 60.3%. Export sales at 0730 this morning and expecting some big numbers.

CHCU spread today nearly 10¢ tighter than where it went off the board a year ago. Basis implications? More on this later this morning.

Somewhat better than expected rains in Argentina yesterday. More in the forecast through the weekend will help alleviate some concern.

Corn basis flat with beans improving. Spread influence at work? INTL FCStone CEO Sean O’Connor going to ring the opening bell on the NASDAQ this morning at 0815.

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