Early Market Talk October 5, 2020

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Markets opened last night lower, reversed to trade higher and at 0600 trading back to near unchanged. Last week proved to be a tougher harvest week than forecast implied a week ago but still saw areas of the western belt make big progress in bean harvest. Some just getting a good start. This week warmer temps and largely rain free should really get things rolling.

At 0600 CZ20 trading unchanged at $3.79 ¾ with SX20 0ff a ½¢ at $10.20 ¼. Vol totals of 15 and 14K on these two. KC and Chi wheat up 9 ½¢

Dow futures 204 points higher at 27,770 this morning. Crude a buck and change higher at $38.64.

Spreads little changed overnight with SXSF at 3 ¾ and CZCH 9 ½. Goldman roll starts this Wednesday on soybeans. Index Fund roll and record net soybean long should have an impact of spreads. First notice day on SX three weeks from this Friday.

Funds estimated net long 127K corn and 249K soybeans. That long if it holds through Tuesday will be a new record net long based on CFTC weekly data. Previous CFTC record was 231K in April of ’12.

USDA monthly Supply / Demand reports this Friday. USDA will incorporate Sept stocks data which will reduce Carryin stocks for 20/21 on both corn and soybeans. Residual use getting the bulk of the change until a suspected production revision next January on 19/20 production.

Some extreme heat in N Brazil over the weekend with a dry week ahead. Our lead forecaster shows relief with rains this weekend and next week. Overall weather conditions in SA starting to get more attention. Northern Brazil starting to see some planting activity with Mato Grosso estimated 2%.

SX20 still trading the best level this date into contract expiration since 2014. CZ20 has seen a couple years higher than today but today’s price higher than CZ contract at expiration also since 2014.

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