Can Grains See a New Month New Money Influx?

(Inside Futures) – Good Morning! Paul Georgy with the early morning commentary forNovember 1, 2016

Grain markets are slightly lower as the typical supply vs demand debate resumes.Traders will be watching for a “new month, new money” mentality for further indication of managed money activity. Outside markets continue their back and forth trade ahead of the next Fed announcement and the presidential election which is now only one week away.

Crop Progress out yesterday afternoon reported corn harvest at 75% complete, an increase of 14% from last week. Soybeans were 87% harvested vs 76% last week, and just above the five-year average of 85%. Winter wheat was 86% planted, advancing 7% from last week, but just behind last year’s 88%. The winter wheat crop was estimated to be 70% emerged, about in line with the 69% five-year average. 58% of winter wheat was rated good/excellent.

Next week’s USDA Supply and Demand report is starting to enter traders discussions. Allendale’s Rich Nelson believes, “when measured against the total corn usage, the current level of ending stocks will be increasing here in the US but posting a slight decline in the world picture. We certainly do have higher supplies than a few years ago but these are not burdensome levels.”

Export Inspections were strong again for soybeans this week at 2,867,212 tonnes. Corn inspections were reported at 791,896, and wheat at 325,496 tonnes.

Flooding concerns have circulated the trade for parts of Argentina, and southern Brazil. However, with it being so early in the growing season, most traders do not believe that this is yet a major issue.

FranceAgriMer estimates France’s corn harvest at 60% complete. That is under last year’s drought damaged 69% pace by this point. Winter wheat planting was estimated at 60% complete. That is under last year’s 72% rate at this point.

Technical traders note resistance at 359 1/4 on the December corn chart. Resistance which has already shown to be a tough level to break.

Wheat bulls continue to discuss dryness across the southern Plains. Forecasts seem to continue to push rains back and each day passes adding further strength to their claims.

Funds were estimated to have been generally quiet in yesterday’s trade. They were thought to be buyers of 4,000 wheat contracts, sellers of 1,500 soymeal, and 1,500 soyoil contracts, and neutral in both corn and soybeans.

New highs were reached again for hog futures. The slaughter situation in the Southeast continues to be overshadowed by talksof lower supplies into November.

Cattle show list numbers suggest feeders have 13,000 head fewer cattle to offer this week versus last.

Gaps are still open on the cattle charts but yesterday’s move bit into the one that is still open down to $103.52 and $100.12 – $100.37 on the December contract. We fully expect all gaps to be filled in the coming weeks.

Dressed beef values were higher with choice up 1.65 and select up 2.85. The CME Feeder Index is 124.67. Pork cutout value is up1.13.