Early Market Talk September 23, 2019

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Firm trade overnight with optimism noted over the weekend from last weeks constructive trade talks. Some 400 Chinese products to have tariffs lifted? Trips to Montana and Nebraska by Chinese trade officials were cancelled but more about perception than signs of problems with talks?

Long road ahead for resolution. Wet weather in US and continued dryness in SA also contributing to overnight strength.

At 0600 CZ19 trading $0.02 ¼ higher at $3.73 and SX19 $0.12 ¾ higher at $8.95 ½. KC and Chi wheat trading higher as well. Typical overnight vol. Dow futures a scratch lower this morning at 26,881. Crude $0.22 lower at $57.87. US $ Index sharply higher.

CFTC data Friday showed Funds holding a much larger net short on corn than trade ideas. Now have them net short 168K as of the close Friday and adjusted for CFTC data.

CZCN spread continues firm in part due to order flow. Trading $0.24 ¾ this morning representing near 40% of full carry.

In the for what it’s worth department, expecting crop ratings to be steady to down 1% in this afternoons Crop condition / progress report. Last week corn and soybean G/E ratings were 55 and 54% respectively.

Temperature forecast trending significantly colder across the north central U.S. during the 6-15-day period. Potential for frost has increased across the northern Plains later next week. Frost potential across the heart of the corn belt remains limited.

Corn challenging recent highs. A close above those highs suspected to spur additional short covering and keep open chart gap a legitimate possibility. Quick look at that will follow shortly………………….

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