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Commentary

Friday’s USDA WASDE crop report, which is expected to see modest declines in the size of this year’s U.S. corn and soybean crops due to the dry finish to the season. The average trade guess for yield in this Friday’s report is 183.7 for corn. This is down .1 from October’s 183.8. Corn’s ending stocks come in at 1.946 billion bushels down 53 million from last month.  Average yield guess for soybeans is at 52.8, down .3 from October at 53.1. Average trade guess for soybeans is 532 million bushels, down 18 million from last month. There has been a lot of noise that a Trump win tonight would pressure grains especially beans as the expectation of trade retaliation from China in response to possible tariffs that maybe forthcoming. It's just noise in my opinion as it won’t matter who wins.  China is already deleveraging from purchasing commodities from the United States. They have been for quite a while as Brazil has wrestled away market share amid a significant increase in planted acreage and production. By the time a new President takes over in late January, China most likely will already be shifting to new-crop purchases from the Southern Hemisphere in my opinion to no one’s surprise. Its policy over recent years has been to buy only what it needs from the United States, while buying as much as it can from other origins. Rains in Brazil during October and early November have soothed fears of a short crop so far there, with Conab citing bean planting progress at 53.3 percent complete, up 4.9 percent from this time last year. Avoid the noise and trade the charts is my best advice. Technical levels for the week come in as follows for January 25 beans. Resistance is 10.09. A close over and its 10.24. A close over and its 10.38/41. Support is 9.97. A close under here and the market could fall back to 9.82 quickly. A close under 9.82 and the market could retest 9.72 then 9.55. 

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Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

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