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Closing Comments

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Closing Comments

Corn

It was a tale of two cities today in the corn as it traded across the range throughout the session following yesterday’s stocks report. The early strength that brought it close to its session highs was met with selling but was supported in afternoon trade with additional buying and strength in wheat.

 

Corn exports for the week ending December 4th were strong at 37.9 million bushels but were 18% below last week’s number.  Trade expectations were 30-40 million bushels.  Japan was the big buyer to note, accounting for over half of the sales while Mexico was a close second. 

 

Buenos Aires Exchange weekly report shows corn planting progress at 51.8% complete which is up from the 44.9% last week, but behind the 55.2% a year ago this week.

 

Basis bids at the Gulf were weaker.

 

Corn closed the March contract up 4 ¾ at 3.98 ½ after trading up a ¼ cent off the November high. The December contract with one day left to trade led the complex higher, closing up 7 ½.

Soybeans

After dropping close to 20 cents yesterday after the USDA report, soy was supported again today by a focus on demand and higher December soymeal.  Tomorrow is the last trading day for the December soymeal contract which could bring fireworks into the final session.

 

Soybeans exports were solid at 29.8 million bushels but were near the lower end of trade expectations at 28-37 million bushels.  New commitments from China were noticeably slim compared to previous weeks.

 

Buenos Aires Exchange weekly report shows 66.8% of the soybean crop is planted which is up from last week’s 54.5% but behind last year’s 67.5% at this time.

 

Basis bids at the Gulf were steady to weaker for soybeans and soymeal.  NOPA crush will be out Monday at 11:00am CST.  A Reuter’s poll has the average trade guess at a record 165.4 million bushels versus the October number at 158 and last year’s at 160.1.

 

A Chinese trade delegation visits Chicago next week and is expected to sign contracts for an unknown quantity of U.S. soybeans.

January held above the 20 day moving average, closing up 10 ¼ at 10.42 ½ with new crop November contract up 8 ½ at 10/18.

Wheat

Wheat brought its own strength to the grains today but not a compelling fundamental story to accompany it. The USDA report reinforced the big carryover yesterday.

An executive with a major commercial firm said he sees no sign of Russia limiting wheat exports.  The Russian Ag Minister says he still expects the 2014 grain harvest to have more than 104 million metric tons.

Trade sources in Ukraine suggest temperatures are moving higher in the European part of the Black Sea and these conditions are set to last another 15 days.  Some concern for snow cover melting which could damage winter wheat crops.

US winter wheat forecast calls for mild temps and moderate rains for the next 10 days.

Egypt passed on U.S. wheat again by taking a total of 6.6 million bushels of Russian and French wheat combined.

March KC closed up 10 at 6.27 ½, Chicago March up 15 ¾ at 5.97 ½ with March Minneapolis participating up 10 ¾ at 6.15 ¼.

Beef

Chatter is that retailers are having a difficult time moving beef and pack margins are around -$120/head.

 

Weak pork and the strong dollar could really affect demand going forward.

 

Undeveloped bids were around $164 live with asking prices around $170, some trade was reported at $164 in the Panhandle this morning.

 

Midday boxed beef prices were mixed with choice at 248.73 down 1.22 and select at 237.20 up .83 with 93 loads traded.

Pork

Sluggish trade on liquidation ahead of the December contract expiration. 

 

There continues to be a stiff discount of futures to cash. 

 

Midday mandatory FOB plant carcass at $90.18 down 2.11 with 191 loads traded.  Bellies were at 100.71 up 1.84. 

Closing Market Snapshot

 

All opinions expressed in this commentary are solely those of Water Street Advisory. This data and these comments are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. There is significant risk of loss involved in commodity futures and options trading and may not be suitable for all investors.

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