Written Commentary
CLOSING COMMENTS
Macroeconomics:
Softbank CEO Masayoshi Son founder of a Japanese tech-investing firm, announces a $100 billion investment in the US over the next 4 years and a promise to create 100,000 jobs in the artificial intelligence space. Masayoshi and Trump met in Mar-a-Lago today to discuss; the money is expected to be deployed before the end of Trump’s 4 year term. Masa talked about his optimism in the United States even calling Trump the “double down President” and joking that they should invest $200 billion. The Japanese Yen has dropped from mid-September highs near 0.73 to now below 0.65. The US dollar trading above 106.80.
Ag Fundamentals:
Corn export inspections were at an 11 week high, 44.5 million bushels, still below the 52 million needed per week to reach the USDA 2.475 billion bu forecast. Managed Money is not +165K contracts long corn. this is a huge swing from the -350K contracts short in July 2024. The US farmer is thought to have sold about 45-50% of their corn crop and 55-60% of their bean crop sold. Bean spreads (SF5/SH5) have firmed due to higher production expectations. China will be hand to mouth for the next 10 weeks but the bulk supply on the back end is making the spread work higher regardless. The US monthly soybean crush numbers are at record high levels for this time of year giving beans a higher floor at around 975’0 support. The Saudi’s 804K MT purchase this mornning gave life to a dormant wheat market, and more open interest was added to the March Chicago Wheat calls with a 700’0 strike price. Russia wheat exports still have a lid on the FOB value knowing their production is at least 7 million MT less than they thought toward the beginning of planting.
The US Dollar Index (Up 6% this quarter) is supported above 100.00 and could extend higher to 115.00.
The Commitment of Traders Disaggregated Futures and Options report expresses Managed Money adding length to their positions across the board. Corn seems to be the most eye-popping position with -350K short to +165K contract swing since July 2024.
Brazil’s Soybean Production and Planted Acres over the last decade have increased from about 100 million MT of beans grown on 80 million acres to 169 million MT grown on 117 million acres. |
Calendar Spreads
Spread | Last | Chg | Full | % of FC |
CH25/CK25 | -6 3/4 | +1/2 | -21 | 32% |
SF25/SH25 | -4 | +2 3/4 | -25 3/4 | 16% |
SH25/SK25 | -10 | +1/2 | -26 3/4 | 37% |
SF24/SN25 | -25 1/4 | +2 1/2 | -79 | 32% |
MWH25/MWK25 | -7 1/4 | – 1/4 | -20 1/2 | 35% |
WH25/WK25 | -11 | -1 | -16 | 69% |
KWH25/KWK25 | -7 1/2 | +3/4 | -16 | 47% |
Cost of Carry
Bean spreads firming is less about the demand up front and more about the supply glut on the back end. Hearing more talk about planting more corn acres in the US next spring.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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