Headlines:
- Hedge funds have seen net withdrawals for three consecutive quarters, the first time that has happened since 2009. One industry tracker estimates over $20 billion has been withdrawn in the last 3 months
- Sugar futures tumble, as CONAB lifts production forecast
The Brazilian crop supply agency lifted its forecast for sugar production in the country’s cane belt by 2.32m tonnes, citing dry weather and the large amount of cane left over from last season. CONAB saw sugar output in the Centre South region at a record 36.55m tonnes for the current 2016-17 season. This compares to a forecast of 34.23m tonnes made in April, at the start of the current season, and 30.88m tonnes produced in the 2015-16 crop year. CONAB forecast total Brazilian sugar production at 39.96m tonnes, up from 33.49m tonnes in the previous season. This compares to a forecast of 37.07m tones from the US Department of Agriculture. - Ukraine’s Ag Ministry estimates total grain production higher this year than last year
Ukraine’s Ag Ministry estimates their total grain production this year will be over 3mmt higher than last year at about 63mmt. Russia’s Ag Minister expects a historically large total grain crop of up to 110mmt. Their grain union says storage capacity will be an issue there.
Summary:
The Pro Farmer Crop tour will be underway next week on Monday. As evidenced by the recent price action over the past few trading days the trade is perhaps looking for additional confirmation that the USDA estimates are on par as far as the Corn yields are concerned. With analyst wondering if the USDA will lower yield projections, Corn Futures have been able to hold up reasonably well this week. December Corn added another 2.50 cents today and the upward projection that can be seen on the daily technical chart looks there is more upside ahead.
As long as Soybean demand from China remains persistent futures should continue to hold above support. Beans orchestrated a rally that began 30 minutes after the regular trading session started and did not look back the balance of the day. After closing marginally lower yesterday November Beans rose 8 cents today closing at 1015.25. If the demand for US Beans can remain consistent over the next week or two we believe that this contract can challenge 1050 in the not too distant future.
Estimates for Germany’s Wheat production was reduced by a German farmers’ coop group. They published production estimates at 24.21 MMT, down from 25.41 MMT. New in general continues to be light for Wheat. Today the September contract finished flat and the December contract was up 1.75
