Headlines:
- First notice day for December futures contracts was today, Wednesday, November 30th
- China is set to cut grain output by 2.5%, or 15 million tonnes, by 2020 in an effort to rehabilitate polluted or degraded farmland
- The 6-10 day forecast is showing an increased chance for above normal precipitation across most of the US with the exception of some areas in the Southwest. There is a significant break in temp probabilities with everything east of the Mississippi River showing above normal temps and everything from the Great Plains and west showing below normal temps with the highest probability surrounding the state of Montana
- PM markets: surging oil price can’t stall ag sell-off
Saudi Arabia blinked, and oil prices soared, but that couldn’t spur any end-of-month buying in grains. OPEC, which comprises most of the world’s major oil producers, has agreed on cuts to production, the first such cut in eight years. The agreement was reached after Saudi Arabia agreed that arch-rival Iran can freeze its output at pre-sanction levels, while itself accepting large cuts to output. Oil prices soared over 8% on the news, suggesting that years of a glutted market, and a complete absence of supply discipline, have come to an end.
Summary:
OPEC reached an agreement to cut Crude Oil production 1.2 million barrels a day in their meeting today. In response, Crude Oil prices rallied past 50 intraday. It was its largest price move since August 2015. This agreement is the first one that OPEC has been able to reach since 2008. The US Dollar turned back up after pausing and trading sideways the last few days.
The grain markets were up in overnight trading but those gains were short lived giving way to profit taking over the course of the trading day. March Corn was very close to flat losing ½ cent, Soybean was down double digits with the March contract off 10.50 cents and Wheat continued lower giving up 6 cents. The strength in Crude was initially supportive of Beans but the strength in the USD alongside of South American competition proved too much for Beans today.
A flash sale of 123,000 metric tons of Soybeans was reported by private exporters to the USDA with delivery to China for the 216-17 marketing year.
Given the volume of supply on deck from the harvest producers have been taking advantage of selling into rallies.
