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While admittedly it was an Undo Tuesday, it would seem that the trade got just a bit carried away with the undoing yesterday. December corn was pressed down to the lowest levels since the 2ndof the month, December wheat wiped out 75% of the Monday advance and beans posted an outside lower reversal day. The fact that we really did not witness any follow-through overnight would attest to the idea that the break was overdone but a slower than expected harvest activity also helped.
For the week ending November 11thcorn harvest had moved ahead another 8% to 84% complete but we have slipped consistently now behind an average pace. We should now be at 87% complete. This really should come as no surprise to anyone in close relationship to the production level as not only has harvest been slowed down by the recent rains, it has been a long and arduous season for many due to the condition of the crop. It is for this reason; I would not be surprised to eventually see the USDA trim yields, even more, come January. Soybean harvest only advanced 5% for the week and stood at 88% complete compared with a normal 93%.
The weekly export sales will not be released until Friday morning, but we are seeing a nice pickup in the daily reporting system. As I already noted yesterday, we sold 276,732 MT of bean to unknown destinations, and this has been followed up with sales reported this morning of another 148,000 MT of beans to unknown and also 212,000 MT of corn to Mexico. One has to suspect that with this pickup in demand and the ever-present threat that the U.S. and China could make nice with each other at the end of the month is keeping a number of would-be bears on the sidelines for now. If we could now find a little positive news for wheat, ag commodities would appear to be a happier place.
In case you missed it earlier this week there was an announcement made by the Brazilian meat company JBS that they have struck a deal with Alibaba of China to send around $1.5 billion worth of beef, pork and chicken to China over the next three years. In case you are not familiar with them, Alibaba is often referred to as the Chinese Amazon. At first glance, this would appear to be a real coup for Brazilian ag, and it should be, but do not lose sight of the fact that JBS has a major footprint in the U.S. as well as it was just a couple years ago that they purchased all of Cargill’s hog production/packing division.