Written Commentary
MORNING COMMENTS
Geopolitics:
Russia shot 7 ICBM missiles into Ukraine overnight. Ukraine was able to shoot down 6 of 7 missiles shot from Russia at the city of Dnipro. The market did not have a strong reaction to the news. No energy or infrastructure sights were hit, but crude oil is up $1.40 this morning. Gold and wheat are also slightly higher this morning.
Macroeconomics:
Unemployment claims came in 7K less than the estimate, at 213K unemployment claims for last week. The next unemployment report will be released on Friday December 6th. the last two months have been stable at 4.1% unemployment rate, down from the year high back in August at 4.3%. the Fed will be looking closely at the labor market going into their December 18th meeting. Currently there is a 55% chance of a 25 basis point cut and a 45% chance of no cut in December.
Ag Fundamentals:
Weekly export sales out this morning show corn at the top end of the estimate range at just shy of 550K MT sold last week for 24/25 marketing year. Ethanol production is at close to record highs as well. If the USDA lowers US production by cutting yields back slightly and increases ethanol and export demand, we could see a little life in corn values. That being said we are at the top side of a downward trend range, we will need a catalyst to break through above 4.40. South American weather looks good. which will continue to put pressure on the soybean market. China is buying a little beans here this week, maybe those purchases start to trend higher into the holiday season and offer support against news of good conditions down south.
Unemployment Claims at 213K, were down 4K week-over-week and came in 7K less than the estimates this morning.
The Last 30 days of Precip Compared to Normal show moisture hitting the southern half of the wheat belt and the eastern half of the Midwest. The Northeast is starting to show signs of dryness heading into winter.
The Soil Moisture Map below has improved drastically since October. Michigan and northern Indiana and Ohio are dry along with eastern South Dakota.
WEEKLY EXPORT SALES
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Export & World News
The US sold 198K MT of soybeans to China this morning. 135K MT of soybeans to unknown destination and 133K MT of soybean meal to the Philippines. Algeria purchased an unknown amount of feed corn from Argentina or Brazil, they were looking for 240K MT in a tender Tuesday. Algeria also has bought more than reported durum wheat from Canada.
Malaysian palm oil futures were down 43 ringgit overnight, at 4772.
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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