Written Commentary
MORNING COMMENTS
Geopolitics:
On Monday, The Biden Administration announced restrictions/limitations on the sale of over 20 different semiconductor-making equipment. Washington fears this technology could help China develop next generation weapons using artificial intelligence. In response, China announced today that they are banning the sale of certain materials that are needed for the production of those semiconductors and electric vehicle batteries. Additionally, South Korea’s president Yoon Suk Yeol declared an “emergency martial law” this morning. That is a developing story and the effects are not yet known.
Ag Fundamentals:
A sharp rise in Malaysian palm oil futures overnight may spark a “turn-around-Tuesday” for soyoil futures, up 70¢ before the open. The COT Futures and Options report shows the funds taking on a more bearish outlook moving into December. December is South America’s most crucial growing month, typically offering the most rain. Soil moisture in both Brazil and Argentina is in a good place meaning even some dry weather and sunshine would help plant health moving forward.
Weather:
The Mississippi River has still not fully recovered from the dry August and September months. The river gauge at Memphis is expected to fall below the max draft level of -2.5 feet on Dece3mber 7th. Rain hitting the Ohio river on the 9th may help, but the central regions of the US will need much more rain before freezing weather hits and holds back water flow.
The Commitment of Traders Futures and Options report below shows the Funds taking on a more bearish position over the last week, putting pressure on prices.
Memphis River Gauge is expected to fall below -2.5 feet by December 7th. This will cause lower drafts and possibly smaller tow sizes.
The Circled Areas below suggest there will be about 1 inch of rain less than normal in these areas over the next 10 days. Soil moisture is in a good spot today, some sunshine may help boost growth.
EXPORT & WORLD NEWS
Japan is looking to buy up to 111K MT of food-quality wheat. Turkey issued an international tender to sell up to 100K MT of durum wheat. South Korea bought an estimated 40K MT of rice from the US last week.
Malaysian palm oil futures were up 120 ringgit overnight, at 5075.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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