We kicked off the day with NFIB Business Optimism Index at 5:00 A.M., Redbook YoY at 7:55 A.M., Fed Waller Speech at 9:00 A.M., RCM/TIPP Economic Index at 9:10 A.M., Fed Barkin Speech at 9:15 A.M., NY Fed Treasury Purchases 1 to 2.5 yrs. at 9:30 A.M., Consumer Inflation Expectations and Export Inspections at 10:00 A.M., 3-Month & 6_Month Bill Auction at 10:30 A.M., 42-Day Bill Auction at 12:00 P.M., Fed Kashkari Speech and Loan Officer Survey at 1:00 P.M., Crop Progress at 3:00 P.M., Fed Harker Speech at 4:00 P.M., and Fed Barkin Speech at 4:30 P.M.

CBOT grain futures open interest has bottomed in late 2022 and has been mending over the last 2 years. Corn open interest flushed ahead of the September expiration but came back strong throughout harvest, and at the end of last week was a near a 3 ½ year high of 1.68 Mil contracts. Compared to a year ago, corn open interest was up nearly 234,000 contracts. Soybean open interest found a secondary low in late 2023 on January liquidation and was at a near 4-yeart high in mid-October. The November expiration produced a correction in soybean market open interest, but open interest last week was 126,000 contracts higher than last year. Wheat open interest bottomed out in September and has increased by 83,000 contracts and set a new high for 2024 last week. Compared to a year ago wheat open interest was 6,000 contracts. Yesterday’s open interest had CBOT Chicago wheat up 189 contracts, while corn was down 6,703 contracts and soybeans were down 2,636 contracts.

Image Source: Unsplash

South American Weather Update

Argentina Trending Drier; All of Brazil/Paraguay to be Well Watered the Next 10 Days:

The South American weather stays broadly favorable. The duration of dryness in Argentina will be monitored, but following heavy rainfall in October the lack of precipitation currently will allow soybean seeding to accelerate. Otherwise, regular showers persist in central and northern Brazilian crop areas beyond Nov 18^th . The EU model’s 10-day % of normal precipitation outlook. It’s a fairly routine pattern into late November. Subsoil moisture reserves will be established across the northern half of Brazil’s soybean belt in the next 10 days, and that LaNina hasn’t triggered prolonged dryness in far southern Brazil is noteworthy. Regular rain will be needed in Argentina no later than Dec 1, but threats there today are minimal given the absence of heat. Argentine temps into Nov 20^th will be capped in the upper 70’s & 8o’s

On the Corn Front

CBOT Corn Corrects at Chart Resistance:

The CBOT corn for the second time since late summer paused its rally at $4.35 resistance. Breaking market-specific news is absent. Ukrainian corn competitive for nearby demand, while the Brazilian market continues to digest seasonal tightening of stocks there, Both bulls and bears lack leverage, and the key this week is whether spot WTI crude can hold support at $66-$67 and whether Argentine forecasts keep intact the return of regular rain in the extended range period. There’s broad agreement that moderate/heavy rain impacts Argentina’s corn ag belt Nov 18-21. The long-term risk remains one of extended US/global stocks in 2025 amid normal weather, but in the medium, spot CBOT’s established range of $4.15 to $4.50, basis March, holds. Cash ethanol prices are forging an early seasonal bottom. Brazil’s cash market is highly unlikely to relax to late spring. US harvest pressure has been digested. Use recoveries this week to catch up on hedges. New end user coverage is recommended only below $4.30 basis March. S American weather becomes more important in December.

US Dollar Scores 4_Month High; Weak Brazilian Real Buffers Against lower CBOT Soybean Price:

The US dollar index on Monday scored newer rally highs, which works against fund inflows into raw materials, but it’s weakness elsewhere that’s a concern longer term. Importer purchasing power continues to retreat, while weakness in the Russian ruble, Argentine peso, Brazilian real, and even the Aussie & Canadian dollars buffer against flat price weakness at the CBOT. Spot CBOT soybeans since January 1^st have fallen 19%. However, when valued in Brazilian real’s, beans are only down 4%. The recent recovery in CBOT soybeans, coupled with weakness in the real, will allow Brazilian producers to maximize revenue. Sustain rallies in soybeans also keep in place plans to expand Brazilian soybean planted modestly Sep/Oct 2025.

Florida Tropical Update:

Gulf hurricane can’t be ruled out .. We are monitoring this tropical depression which is expected to gain hurricane strength in the Gulf and will be named Sara.

More By This Author:

Fed Decision Day - The Corn & Ethanol Report
Election Day Markets. The Corn & Ethanol Report
Need A Gamechanger For U.S. Economy. The Corn & Ethanol Report