Corn – Surprising changes to carryout takes fair value to 470, the bar is now set high for exports
↑ Yesterday the USDA raised ethanol demand by 50 mil bu and raised exports by 150 mil bu
↑ The 200 mil bu total decline in carryout suggests a new fair value level of 470
↔ The USDA has now set an aggressive target for exports, trade may remain cautious to fully factor
that in with expected tariffs to start in January and concerns over the border with Mexico
↔ Some major questions trade is likely to have: Can the export new export goal be reached? While not
as difficult, can the new ethanol goal be reached? 2 questions which may limit a move towards 470
Beans – No changes to carryout so the recent pattern could continue to the January crop report
↔ The USDA left bean exports unchanged which keeps beans in the same mindset as before the report
↔ This cautious mindset by trade could keep beans in the 980’s to 1000 range that we have seen
↓ There has not been an 8 AM sales announcement since Thursday, the more days that go by without a
morning sale, the more cautious trade is likely to be
↔ Keep in mind that the current export pace is very strong, trade’s concern each week is over what the
next week’s exports will be, keeping a consistent fear exports could come to a halt any day
Wheat – Small carryout decline, slow recovery continues, exports expected moderate tomorrow
↑ Both US and overseas wheat has seen a small recovery from recent lows, for March CHI wheat that
means moving back above the trend line again helping to ease up on technical selling pressure
↑ The USDA raised exports 20 mil bu (also raised imports by 5 mil bu for a total carryout change of -15
mil bu), this small carryout decline could be enough to keep the recent slow recovery going
↔ Export expectations start to fall off this time of year so even moderate (300K) exports is supportive
Cattle – Futures set aside almost all caution that was factored in, border rumors change daily
↔ Yesterday’s PM BB was choice -2.41 select +0.31 packer BE at 187.76, packer cushion -$3.09
↔ Futures were cautious late last week keeping a price level nearly $3 under cash but after the
bounces seen this week yesterday’s trade finished pricing in a level just -$0.50 to cash
↔ The cautious trade likely came on talk that the Mexico border could be re opened by Christmas or at
least the end of the year but yesterday’s border talk suggested it could be much longer than that
↑↓ We should expect constant changes to border opening thoughts and expect that to offer regular
day to day volatility, this is likely to continue until we get a solid date from the USDA