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November 4, 2019

© 2018•Trilateral

Trilateral Grain and Market Weather Update

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© 2019 •Trilateral 2

“Corn” on page 3 “Soy Complex” on page 4“Wheat” on page 5 “Related Market News” on page 6 “Weather Update” on page 8 “Feedstuffs” on page 9

Contents

Commodity Month Last ChangeCorn Dec 3.8600 (3.25)

Soybeans Jan 9.3650 0.75 Soybean Meal Dec 302.90 (0.90)Soybean Oil Dec 31.4500 0.44

Chicago Wheat Dec 5.1250 (3.25)KC Wheat Dec 4.2325 (2.00)

MPLS Wheat Dec 5.2525 (6.00)

Commodity Month Last ChangeCrude Oil Dec 57.06 0.89

Natural Gas Dec 2.905 0.108 Gold Dec 1513.10 1.70

S&P Futures Dec 3080.50 17.00 Dollar Index Cash 97.39 0.146

Overnight Trade

Market Summary Highlights

Morning Trading

• Corn • Soybeans • Wheat

USDA, Government & Industry Reports

Market Headlines

Corn:

Soybeans:

Wheat:

• Dow Jones: Higher• U.S. Dollar Index: Higher• Gold: Higher• Crude Oil: Higher• •

LowerHigherMixed

Pressured by U.S. yield upgrades

Funds add to bullish soybean bets with futures near 16-month highs

Curbed by technical resistance after a rally on Friday and news of weekend rain relief in drought-hit eastern Australia.

• Crop Progress • Factory Orders

© 2019 •Trilateral 3

CornSources: DTN and Reuters

• Lower corn prices overnight as we open the first full trading week in the month of November. December corn is attempting to close lower for the third con-secutive session, something the contract hasn’t done since late September.

• Another relatively open week is expected for the ma-jority of the Midwest, allowing harvest to progress where grain is dry

• Adding to the negative vibes early Monday, was INTL FC Stone’s Friday estimate of corn yield at 170 bpa for 2019-20 -- higher than last month’s 169.3 and USDA’s 168.3 bpa esti-mate for October.

• Also pressuring the market is the outlook for rains in both Argentina and Brazil. Argentine farmers have advanced sales rapidly ahead of what is expected to be a rise in export taxes from the new administration in December.

• Corn registrations for export from Argentina for October were 3.5 million metric tons (mmt), and Brazil shipped nearly 6.2 mmt of corn -- nearly double last year’s October exports.

• Funds added to their net corn short last week, and to begin this week are now thought to be holding a net short of close to 130,000 contracts, including options.

• China corn prices continue to rise, as feed grain stocks are very low, with some feed mills said to have just to 7 to 10 days of usage, according to Linn Group, leaving some hope that China will need to ramp up imports of corn and corn products at some point.

• Monday’s crop progress is expected to reveal corn harvest at 57% to 58% done compared to the normal 77% pace at this time of year.

© 2019 •Trilateral 4

Soy Complex Sources: DTN and Reuters

• Soybean futures are slightly higher overnight. • Optimistic comments from Trump administration offi-

cials strongly suggest a phase 1 trade deal signing is imminent.

• Soybeans were firm late week on that optimism, and due to Cargill’s decision to take all of the soybean deliv-eries -- perhaps looking to secure hard-to- buy bushels in the event of the trade pact signing.

• INTL FC Stone lowered soybean yield to 47.5 bpa from last month’s 48.1 bpa, but higher than USDA’s 46.9 bpa estimate. FC Stone also pegged Brazil’s 2020 soybean production at a hefty 121.8 mmt compared to USDA’s 123 mmt projection.

• As in corn, Argentine farmers have been rushing sales out the door, assuming a December increase in export taxes.

• October export registrations for soybeans were 1.65 mmt, and for soy meal, 1.627 mmt, while Brazil ex-ported 4.87 mmt in October -- up from 4.45 mmt in September. Brazil’s soybean basis has firmed sharply, called 115 over nearby futures for spot delivery, al-though February is said to be just 50 over.

• September Census soybean crush was reported at 162.3 mb versus 161.8 mb expected and NOPA at 152.6, but well below August crush of 177.5 mb.

• Palm oil on Monday, continued its strong performance, and is up 2.9% to a 20-month high, as tight world supplies, higher biodiesel usage projections, and a drop in EU rapeseed produc-tion sends palm and soybean oil sharply higher.

• Soybean oil prices have been trending higher since May, and when one looks at the major vegetable oil markets, it is not difficult to see why. The combined global balance sheet of soybeanoil,rapeseedoilandpalmoilwillseethelargestcombinedproductiononrecordat 160.6 million metric tons (mmt) but the smallest ending stocks since 2010/11. The com-binedstocks/useratioof6.66%acrossallthreemarketsisthetightestinover40years.

Soybeans

Meal

Oil

© 2019 •Trilateral 5

WheatSources: DTN and Reuters • All three wheat futures markets are under pressure to

start the week, following Friday’s sharp gains. • Chicago wheat is still maintaining an intermediate term

uptrend, although the short-term trend is down. • Managed commodity funds were net sellers of wheat fu-

tures last week, and begin the week net short 20,000 Chi-cago, 29,000 KC and 9,000 Minneapolis.

• Argentine wheat harvest is just 4% complete, with pro-duction estimates sliding lower. The Buenos Aires Ex-change was the latest to slash production, to 18.8 mmt, from earlier estimates of over 20 mmt, as dryness re-duced the crop.

• In Australia, heavy rains fell over the weekend in drought-ravaged Eastern Australia, and although it was a relief for the livestock industry, it may have been too late for grains.

• The combined production of Argentina and Australia is expected to be 35.3 mmt which would be the smallest since 2015/16. Combined exports are seen rising to 23.5 mmt from 21.3 mmt last. Ending stocks are seen at 4.201 mmt which would be the tightest since 1998/99. North-ern Hemisphere exporters are expected to carry out 56.5 mmt, which would be the smallest since 2014/15

HRW

SRW

HRS

© 2019 •Trilateral 6

Related Market NewsRJO• Mostly dry 2+ week stretch for U.S. reduces harvest concerns• Palm oil futures rally strongly pulling SBO along

DTN• Industry estimates expect U.S. corn harvest at 57-58% complete vs 77% average while soy-

bean harvest is seen at 76-77% complete vs. 87% average. • Commodity brokerage INTL FC Stone released their latest yield estimates Friday, pegging the

corn crop at 170.0 bushels per acre (bpa) vs. 169.3 bpa last month and 168.4 bpa from the USDA.

• The combined global palm, rapeseed and soybean oil stocks/use ratio at 6.66% is the tightest since 1976/77.

• Large spec traders bought soybeans for the seventh consecutive week last week, purchasing a net 139,741 contracts over that span.

Reuters• Palm oil jumps nearly 3% on expectations of tightening supplies, hit 20-month high. Malay-

sian palm oil futures surged to their highest in 20 months on Monday, boosted by expecta-tions of tightening supplies and strong demand led by biodiesel consumption. Top palm oil industry analysts on Friday raised their price outlook for palm, pointing to reduced produc-tion and optimism that Indonesia’s so-called B30 biodiesel programme will help bolster demand. World’s top palm oil exporter Indonesia aims to have 30% of the palm-based bio-content in biodiesel next year, up from 20% presently. Malaysia and Thailand are also ex-pected to expand their biodiesel mandates. Dorab Mistry at an industry conference in Nusa Dua said Malaysian palm oil output in 2020 was expected to be lower than 2019, due to dry weather and fertilizer cuts.

• Strategie Grains sees EU 2020/21 rapeseed area well below average: The area sown with rapeseed in the European Union this year will be well below the five-year. Estimated EU rapeseed sowings are 8% below the 2015-2019 average

• China booked deal for 132,000 tonnes of U.S. soybeans on Friday, the latest in a string of purchases.

• Delays in Brazil’s soybean planting due to scarce rainfall may affect sowing of the country’s second corn crop, which is planted after the oilseed is harvested and represents about 73% of the South American output. According to agribusiness consultancy Arc Mercosul, soybean planting is at 46.9% of the expected area for the 2019/2020 season, way below the 61.6% level seen at this time last year and lower than the 49.2% five-year average.

• China says Xi, Trump in continuous touch: Chinese President Xi Jinping and U.S. President Donald Trump have been in continuous touch through “various means”, China’s Foreign

© 2019 •Trilateral 7

Ministry said on Monday, when asked when and where the two leaders might meet to ink a trade deal.

• Germany’s manufacturing sector remained stuck in recession in October as new orders fell for the 13th month running and factories slashed jobs at the fastest pace in almost 10 years.

• Factory activity across the euro zone contracted sharply last month as demand was again stifled by the U.S. trade war with China and the persistent lack of clarity over Britain’s depar-ture from the European Union, a survey showed.

Related Market News cont.

© 2019 •Trilateral 8

Weather UpdateDTN Ag Weather Brief:

• MIDWEST (CORN, SOYBEANS): Only episodes of scattered light precipitation during the next 7 days will allow for the late har-vest progress. A possibly excep-tion is areas near the Ohio river and in the Delta where some rain may slow progress later in the week.

• NORTHERN PLAINS: Only epi-sodes of scattered light precipi-tation during the next 7 days will allow for the late harvest prog-ress.

• CENTRAL/SOUTHERN PLAINS: Some beneficial rains for the wheat crop in southern areas during mid-week.

• BRAZIL (Soybeans/full season corn): More rain is needed to support soy-bean planting and development in Parana and the Mato Grosso. Some beneficial showers and thunder-storms are expected this week, espe-cially in Parana and MGDS but possi-bly in Mato Grosso as well. Favorable conditions for planting and develop-ment of early planted crops in RGDS.

• ARGENTINA (CORN): Thunderstorms during the weekend and today will maintain adequate to surplus mois-ture for corn in Santa fe while help-ing to improve moisture supplies in Cordoba. Although portions of Cor-doba could use more rain.No signifi-cant delays to seasonal field work. Somewhat hotter, drier weather is possible later this week.

© 2019 •Trilateral 9

Commodity IndicesFeedstuffsLinks to weekly USDA feedstuffs reports:

• National Weekly Feedstuffs Prices • Corn Belt Weekly Feedstuffs

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