Headlines:

  • Smucker shares soar, as it foresees weaker coffee costs ahead
    Shares in JM Smucker saw their best gain in nine years as the owner of brands including Folgers and Dunkin’ Donuts coffee forecast weaker bean costs, amid expectations of bumper arabica supplies. Shares in the Ohio-based group – which is the largest US coffee roaster, besides running food and pet nutrition operations – soared 9.9% at one point, their biggest one-day gain since November 2008, before easing back to $116.30 in lunchtime deals in New York, up 9.2%. The jump followed the release of earnings for the August-to-October period which beat expectations, and reassurance that full-year performance will beat forecasts, helped by the boost to margins from a sharp decline in the price paid for coffee. Indeed, for the February-to-April period, the last quarter of JM Smucker’s financial year, the group is forecasting “record fourth quarter segment profit for coffee, primarily resulting from lower green coffee cost and cost-savings initiatives”, said Mark Smucker, the group’s chief executive.
  • Weak prices, poor weather leave EU on course for 2018 wheat area drop
    Strategie Grains ditched ideas of a rise in European Union soft wheat sowings for the 2018 harvest, foreseeing them on course for a fourth successive year of decline, undermined by weak prices and wet weather. The influential analysis group lowered by 300,000 hectares, to 23.5m hectares, its forecast for soft wheat sowings in the EU, the top producer of the grain. The downgrade took the figure below the 23.7m hectares seeded last year, and further below a recent high of 24.4m hectares, set ahead of the 2014 harvest. The weakened forecast reflected in part weak prices – with Paris’s December futures contract on Wednesday touching E158.75 a metric ton, its lowest level since August – besides a wet weather which slowed fieldwork in some parts of central Europe.

 

Summary:

Soybean settles lower today. Wheat was mixed/flat and Corn finished marginally lower. The USDA Weekly report numbers produced disappointing numbers and weather reports coming regarding South America were positive. That would have led one to believe that the action today would have been more bearish but instead the action was rather bland. We are only a week away from Thanksgiving so it is possible that traders are already preparing for the break and the “Black Friday” spectacle that comes with it these days.

Soybean export sales estimates came in at 1.17 million metric tons (mt) vs trade estimates from 1.0 to 1.65 million metric tons (mt).  Corn came in at 949.5k mt vs the trade estimate spread of 800k to 2.2 million mt. Finally, Wheat came in at 519.3k mt vs the estimates of 350k to 800k mt. All estimates came in at the low end of trade expectations.