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Walsh Daily Recap at Close 11/9
Crush
The December crush widened about 6 cents to roughly $2.00, its first bigger gain in two weeks. January beans settled down 5½ cents, which added 5½ to the margin, and December meal settled up $1.50, adding about 3½, while December soybean oil settled down 23 points and subtracted about 2½. Meal is the larger half of product value at about 50.8%. The crush had fallen from $2.47 in late October to $1.93 on Friday.
Soybeans
January soybeans settled down 5½ cents at $11.88¼, trading from $12.02½ down to $11.86¼ on volume of 132,080. The contract is trading below both its 14-day average at $12.24⅜ and its 21-day at $12.38⅞. USDA releases Crop Production and WASDE on Tuesday, with analysts expecting an increase to the soybean yield estimate. StoneX has the US yield at 55 bushels per acre against USDA’s current record 53.1. Friday’s Commitments of Traders report showed funds cut their net long in soybeans by 52,601 contracts, or 28%, to 132,799 in the week ended Nov 3. China on Monday extended its trade truce with the US by two months to Jan 10, eliminating a 24% retaliatory tariff and holding off on port fees.
Soybean oil
December soybean meal settled up $1.50 at $320.70, trading from 321.60 down to 316.50 on volume of 70,121. It is trading below both its 14-day average at 328.90 and its 21-day at 334.10. December soybean oil settled down 23 points at 62.03, trading from 63.08 down to 61.91 on volume of 71,208. It is trading below both its 14-day average at 64.81 and its 21-day at 65.56, and has closed below its 200-day moving average every session since Oct 28. Malaysian palm oil fell another 2.72% and is at its lowest since March, after Indonesia cut its November crude palm oil reference price by more than 6% and lowered its export levy. Palm oil competes with soybean oil, so lower palm prices are dragging on soybean oil. Nymex WTI crude fell nearly 3% to $88.19 after President Trump said over the weekend that extensive strikes on Iran were “highly unlikely.”
Corn
December corn traded down 2¼ cents to $4.39¼, ranging from $4.38 to $4.43¾ on volume of 258,998. The contract is trading below both its 14-day average at $4.51 and its 21-day at $4.58⅞. Friday’s Commitments of Traders report showed managed money is now net short 22,900 contracts after cutting 28,380 longs and adding 50,463 shorts in the week ended Nov 3. Saxo Bank’s Ole Hansen noted corn has moved from a record net long of 431,000 contracts to that net short following an 18% price decline since September. Combined grains and oilseeds net long down 83% in six weeks to 166,000 contracts. USDA is expected to cut its corn yield estimate in Tuesday’s reports.
Wheat
December Chicago wheat settled down 3¼ cents at $5.88, trading from $5.94 down to $5.86¼ on volume of 104,586, a new low for the move. It is trading below both its 14-day average at $6.10½ and its 21-day at $6.23¼. December Kansas City wheat settled unchanged at $6.32½ and December Minneapolis rose 6 cents to $6.22. Net short positions in both Chicago and Kansas City wheat grew in the latest Commitments of Traders report. Russian, Ukrainian and US negotiators meet this week for the first time since February, with security guarantees as the main importance.
Cattle
December live cattle settled up $2.15 at $216.20, trading from $214.70 up to $218.95 on volume of 35,842, the first gain in nine sessions. It is still trading below both its 14-day average at 220.94 and its 21-day at 222.14. January feeder cattle settled up $5.80 at $324.175 after reaching $327.35, also below both its 14-day at 330.54 and its 21-day at 331.40. Live cattle fell $6.90 last week and feeders lost $13.40, with December live cattle hitting an 11-month low Friday. Cash cattle averaged $217.26 for steers and $217.56 for heifers last week, down from $227.06 two weeks earlier.
Hogs
December lean hogs settled up $2.35 at $55.875, trading from $53.525 up to $56.50 on volume of 61,380, after setting a contract low Friday. The contract is trading below both its 14-day average at 59.34 and its 21-day at 61.22. The December pork cutout was unchanged at $89.60. Monday’s CME lean hog index was down $1.29 at $61.57. Lean hogs fell $5.35 last week.
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