CBOT weekly outlook: Eyes on U.S. election, next supply and demand report

MarketsFarm — With no final results yet Wednesday in the U.S. presidential election, there has been very little, if any, effect on the Chicago Board of Trade (CBOT), according to Allendale Inc. president Steve Georgy.

“For the grain markets there hasn’t been a higher impact yet, but it is rather quiet,” he said from McHenry, Ill.

The day after Tuesday’s election, Democrat challenger Joe Biden was leading the Electoral College vote count with 237, compared to 213 for Republican incumbent Donald Trump, according to CNN. In order to win, a candidate must obtain a minimum of 270 Electoral College votes.

Also, Biden was leading the national popular vote 50.3 per cent to 48.1 for Trump.

Georgy said the election’s effect on the markets will boil down to how the U.S. dollar reacts. The greenback on Wednesday was around 93.405 points on the U.S. Dollar Index, slipping back a little from Tuesday.

“Right now there are a lot of people sitting on the sidelines waiting to see how this thing will pan out,” Georgy said.

Attention needs to be on the next supply and demand estimates from the U.S. Department of Agriculture, due out Tuesday (Nov. 10), he said.

“Will we see tighter ending stocks [for corn and soybeans] or not?” he asked, noting both are in a sideways consolidation.

Several market predictions have forecast reduced yields for corn and soybeans. USDA’s October report estimated corn yields at 178.4 bushels per acre. StoneX and IHS Markit have called for lower corn yields of 178.9 bu./ac. and 175.7 bu./ac. respectively. Meanwhile, CmdtyView upped its projection to almost 180.4 bu./ac.

For soybeans, USDA last month estimated yields at 51.9 bu./ac. CmdtyView lowered its call to about 50.1 bu./ac. and IHS Markit slotted its projection at 50.8.

Should USDA follow suit, Georgy said that could be the spark that gets markets going again.

— Glen Hallick reports for MarketsFarm from Winnipeg.