Headlines:

  • Trump hopes OPEC won’t cut production, says oil prices should be lower
    U.S. crude prices turned negative as U.S. President Donald Trump said he hoped there would be no oil output reductions, after Saudi Arabia said OPEC was considering cutting supply next year, citing softening demand. “Hopefully, Saudi Arabia and OPEC will not be cutting oil production,” Trump wrote on Twitter. “Oil prices should be much lower based on supply!” U.S. crude turned negative and extended losses after the tweet. Oil prices had strengthened earlier in the session, after Saudi Arabia said the Organization of the Petroleum Exporting Countries and its partners believed demand was softening enough to warrant an output cut of 1 million barrels per day next year. Saudi Energy Minister Khalid al-Falih said OPEC and its allies agree that technical analysis shows a need to cut oil supply next year by around 1 million bpd from October levels. Saudi Arabia, the world’s largest oil exporter, said on Sunday it would cut its shipments by half a million bpd in December due to seasonal lower demand. “We’re kind of back to square one: It must feel like November 2016 to them, a lot,” said John Kilduff, a Partner at Again Capital Management in New York, referring to the time period when OPEC and its allies agreed to initiate production cuts. “The Saudis and Russians, especially, rushed production to market to offset losses that aren’t materializing.”
  • Funds’ CBOT views seen little changed after USDA bombshell
    The U.S. Department of Agriculture’s monthly supply and demand report can often be mundane in November, but Thursday’s update was far from uneventful, with loads of moving parts. However, the new data did not appear to significantly change investors’ minds toward Chicago-traded grains and oilseeds. The report ultimately revealed an expected tightening of global grain supplies into mid-2019 and an expansion of soybean stocks, especially in the United States. However, the adjustment of historical data out of China made it difficult to quickly identify these trends in the grains.

The mood in the days leading up to the report was relatively optimistic. Investors spent the week ended Nov. 6 trimming bearish positions or extending bullish ones. However, they were likely net sellers across the board between Wednesday and Friday, but trade estimates suggest a lighter degree of selling.

 

Summary:

Corn prices were mixed on the day finishing flat at settlement. Weather forecasts calling for lower than normal temperatures to remain persistent throughout the Midwest for the balance of this week. The soybean market traded lower on the day. After a strong positive close on Friday, producers were looking for following through continued strength that did not materialize. The ongoing trade tussle between the US and China has led to reports of Brazil’s anticipated soybean exports rising to 83 million metric tons (MMT), an increase of 15 MMT for in 2018. Indications also show that the Ukraine soybean crop is finishing up and harvest is expected to be 4.3 million tons, which is 800k tons more than last year. The wheat market rallied because of funds covering shorts given concern over poor weather in Kansas. Heavy snowfall fell across Kansas which will delay producers from finishing up their winter wheat planting which put a big dent in the original estimate of winter wheat planted. Wheat traded as high as 20+ cents on the day and settled with a 16.75 cents gain.