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  • US winter wheat deteriorates, opening up soft-hard divide
    The condition of the US winter wheat crop deteriorated further, taking it to a below-average rating, amid dryness testing in particular hard red winter wheat areas, expanding their divide to soft red states. The US Department of Agriculture, in a much-watched weekly briefing, lowered by 2 points to 52% its rating of the proportion of US winter wheat rated “good” or “excellent”, undercutting market expectations of an unchanged reading. The downgrade took the rating well below the 58% figure recorded a year ago, and a five-year average of 54%. It reflected further deterioration in many Plains states growing hard red winter wheat, affected by drought, contrasting with improvement in some Midwest areas producing the soft red winter wheat traded in Chicago. In the Plains, the rating for Nebraska winter wheat dropped by 7 points to 56%, in a week which USDA scouts said was marked by “limited” rainfall and temperatures which in western areas averaged 6-7 degrees Fahrenheit above normal. In Oklahoma, the second biggest winter wheat growing state, the rating fell 4 points to 37%. “Dry weather continued to be prevalent throughout the state,” USDA scouts said, adding that “drought conditions continued to expand. “It has been 48 days since the western panhandle has seen at least a quarter-inch of rain in a single day.” In Montana, the rating dropped 3 points to 36% of winter wheat seen as good or excellent, amid dryness which has left 42% of topsoil “short” or “very short” of moisture, up from 28% a year ago.

Summary:

The markets were mixed today ahead of the Thanksgiving Day break. Trading is expected to be light tomorrow and the CME Group exchange will close early tomorrow and close on Thursday. Corn futures finished the day down one tick across the board. The current weather outlook for the Corn Belt is calling for some drying that is expected to help pick up the harvesting pace for this final stages of the Corn harvest. Corn planting projections for the Brazilian crop estimates were at 81% trailing last year’s pace by 11.4%. Soybean futures were 1 to 1.50 cents lower on the day. There was not any news to speak of to push any significant activity ahead of the break. Private exporters reported a sale of 130,000 metric tons of Soybeans for delivery to China during the 2017-18 marketing year. The USDA introduced a new 24-hour reporting system recently. This is the 1st Soybean report to use the new system since October 27th. Wheat futures were mixed with December and March gaining ground (2.75 and 3 cents respectively) and the May contract down 1 tick. Wheat is very close to our time and price projection for a potential low. Confirmation is yet to establish itself but the divergence on the technical chart continues to suggest that a low may be due soon.