Closing Comments – Holiday Trade Edition through Dec 31st
Crude oil inventories fell 5.9 mln bbls this week, gasoline saw a 1.1 mln drawdown while distillate stocks were off 0.7 mln bbls. The market was looking for 1 to 2 mln builds across the board which provided support to the energy market today. I guess if you keep lowering your expectations, eventually you won’t be disappointed.
Corn was weak today on light holiday volume and lack of urgency by users to lock in supplies. Weekly ethanol data had a mixed tone, featuring an expected decline in production along with a very small inventory build. Production fell 3 percent this week and the industry ground about 102 mln bu of grain which would roughly equate to an annual grind just under 5.2 mln bu. Gulf basis and processor bids showing a steady to weaker bias. Argentina’s govt estimate for 15/16 corn acres added 100k ha.
For soybeans, direction is driven off the comings and goings of rain outlook for northern Brazil – specifically Mato Grosso and Goias. Scattered rains have provided some relief but the market is primarily counting on a change of pattern to come in the next 10-15 days. Board crush margin trading at new lows of 55 cents keep offers tepid and strength in soybeans suspect until soy meal can lead. Argentine’s govt estimate for soybean acreage for 15/16 showed an increase of 100k ha.
Aggressive offers by Argentina in wheat put them as the low price provider and highlights the competitiveness of the global grain markets as we move into 2016. Current production concerns are too wet of conditions from recent storms for soft wheat in the southern Midwest as well as dormancy issues in parts of the US and Europe from the exceptionally mild winter conditions.
Cattle and feeders extended their recent bounce from the bullish Cattle on Feed report, yesterday’s cold storage report that showed slightly less beef than anticipated and concern over forecast weather in the Southern Plains. Cash sources in KS reported fed cattle up $2/cwt over yesterday to $124 on light volume.
Quarterly Hogs and Pigs report showed all hogs at 101 percent of a year ago vs trade expectations of 101.5 percent. For market at 101 percent vs trade expectations of 101.6 percent. Dec 1 all hog inventory at 68.3 mln head, highest for the period since the quarterly report started in 1988. Pigs per litter averaged 10.53, a record high for the period.
Closing Market Snapshot
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