Play Turner’s Take Podcast Episode 207
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A meeting between the US and China for Presidents Trump and XI to sign Phase One of the trade deal may be pushed back to December. Dec Hogs lead the ag markets down followed by soybeans.  The stock market also sold off on the news.  The WASDE is Friday and we are expecting the USDA to reduce corn exports and for new crop ending stocks to surpass 2.0 billion bushels.  To hear more about our WASDE expectations and marketing plans, take a listen to this week’s Turner’s Take Podcat
Corn
We are hearing elevators in Southern Illinois are no longer taking corn.  They need to close their doors and dry their corn down before they can take any more.  We also heard of an elevator in Decatur offering zero discount for corn with moisture at 19% or less.  There is a lot of wet corn out there.
Barring a bullish surprise in the WASDE on Friday, we think corn bleeds lower into First Notice Day (Nov 29).  Ending stocks of over 2 billion could send Dec corn to $3.65.  Many bulls think yields are in the mid to low 160s.  That could be the case but we find it unlikely the USDA will get that aggressive in the Nov WASDE report even if they think yields will eventually come down.
Below is a table of old crop, new crop, and our expectations for the 2020-21 crop.  Take a look at the projections for next year.  The prospect of having a 2.7 billion corn carryout for 2020-21 will keep a lid on corn rallies.
Corn Supply and Demand Tables

Soybeans
China needs pork and to some extent they also need US soybeans.  We are not optimistic on a US-China trade deal.  We would not be surprised if all of these “good will” Chinese purchases in pork and soybeans are just a way for them to save face and buy the US goods that they need with our self imposed tariffs.
We think the ending stocks will still be in the mid 400s when the WASDE report is released on Friday.  We don’t think the USDA will change supply or demand that much.  If there are major adjustments we think it happens in January. Stocks-to-Usage is at 11% and that is an adequate supply of soybeans.  Next year with 84 million acres and a trend line 50.5 yield, ending stocks increase to 519.  That is still not a burdensome number.  Any weather rallies in South America or the US could send beans up to $10 in the deferred contracts.  We are much more bullish soybeans than corn at this point.  Speculators should take a look at Soybean vs Corn future spreads.
Soybean Supply and Demand Tables

 
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Craig Turner – Commodity Futures Broker
Turner’s Take Ag Marketing: https://www.turnerstakeag.com
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Twitter: @Turners_Take