Walsh Daily Bullet Points 11/13

GRAINS

• Everything is bouncing this morning, Dec corn up 5¼ and Dec Chicago wheat up 11½
• Dec KC wheat up 9¾, Mar Chicago up 10¼
• Wheat is coming off eight month lows and was deeply oversold going in
• Black Sea attacks ramped up again after the Abu Dhabi talks failed to secure a safe shipping corridor, that is the reason wheat turned
• CONAB left its Brazil corn production forecast unchanged
• The US harvest is winding down
• Weekly export sales come out this morning, a day late because of Veterans Day
• China is pushing the US to cut tariffs first to create better conditions for ag buying, and insists the US implement the 30 billion for 30 billion reciprocal tariff deal before it moves
• The Climate Prediction Center said Thursday the super El Niño keeps strengthening, with a strong to very strong event likely through January to March at better than 79% odds
• Odds of a historic event beating anything back to 1950 are now around 60% for October through January, down from 83% in the October update
• Corn open interest up 9,427 Thursday, Chicago wheat up 10,597, KC up 1,075
• The administration is expected to extend the Jones Act waiver, which helps move fertilizer and fuel between US ports more cheaply
• Dalian corn down 0.32%

OILSEEDS

• Beans are leading, up 17½ overnight, with meal up 4.00 and Dec oil up 76 points
• Jan beans pushed to a new high for the week after holding support near Thursday’s low
• Bean open interest jumped 14,141 contracts Thursday even on a lower day, so buyers were stepping in on the break
• Meal open interest up 1,087, oil down 3,444
• Malaysian palm is near 4,500 ringgit and finished the week higher, helped by a weaker ringgit and firmer Dalian oils
• The smaller than expected October stock build is still the driver, 3.62 million tonnes against the 3.75 million the trade looked for
• Dalian palm up 0.71%, Malaysian palm up 0.50%, Dalian beans down 0.44% and meal down 0.32%
• Jan canola settled 777.30, up 6.90
• Jan crush settled around 190½, down about 2 cents
• Meal 50.5% of product value, oil 49.5%
• Both products fell Thursday but beans fell harder, which kept the margin from narrowing much further

LIVESTOCK

• December live cattle eased 7½ cents to 218.90 on mild corrective selling
• Cash cattle trade was very light and at lower money, which is what capped the market
• January feeders jumped 3.875 to 331.675 on short covering and bargain buying, helped by corn trading lower
• Feeders traded a wide range, 327.55 to 334.075
• Hogs fell 87½ cents to 55.15 on renewed technical selling, and the charts are still firmly bearish
• Cash hog prices and the CME index both keep trending lower
• Friday’s projected CME lean hog index is down a full dollar at 58.78

SOFTS

• Coffee was the big mover, March up 9.90 to 274.55
• Cocoa added 158 to 5,204, its second strong day in a row after funds had been carrying a net short
• Sugar slipped 26 points to 18.22 after Wednesday’s bounce
• Cotton edged up 12 points to 82.51
• Sugar funds are still carrying a large net long from the week of 11/3, 227,793 against commercials short 271,913, which keeps that market vulnerable to liquidation

FINANCIALS

• Dollar index edging higher again after this week’s 19 month high, the main headwind for everything
• 10 year Treasury at 5.133%, decisively back above 5% after hot inflation data locked in December rate hike expectations
• October PPI is out at 7:30 a.m. CT, expected up 0.4% with core up 0.3%, a hot number would raise talk of a half point hike
• WTI down 0.4% at 88.40, stock futures higher
• Nvidia’s Huang resigned Thursday and the fallout is putting next week’s Trump and Xi meeting at risk, which matters for any Chinese ag buying

CURRENCIES

• Dollar at 19 month highs is working against every export market we have
• A hot PPI this morning would extend the dollar rally
• A weaker ringgit is part of what is holding palm up, it makes Malaysian oil cheaper for buyers paying in dollars

SETTLEMENTS

• Dec corn 4.42½ (−5½) · Dec Chicago wheat 5.84¼ (−15¼)
• Jan beans 12.19 (−11¾) · Jan meal 323.60 (−3.90) · Dec soyoil 63.42 (−0.46)
• Feb live cattle 222.95 (+0.25) · Jan feeders 331.675 (+3.875) · Dec hogs 55.15 (−0.875)
• Mar cocoa 5,204 (+158) · Mar coffee 274.55 (+9.90) · Mar sugar 18.22 (−0.26) · Mar cotton 82.51 (+0.12)
• Crush (Jan): 190½ --- meal 50.5%, oil 49.5%

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