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Closing Comments

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Closing Comments

Corn

Last week’s light holiday volume picked up slightly today, but should remain low until after the first of the year. Providing plenty of opportunity for erratic trade action as the market prepares for the Jan 12th USDA report.

Crude put in new contract lows again today while the dollar put in new contract highs and equities are mixed.

No real news on the weather front in South America. Parts of Brazil continue to be a bit too wet but expect to experience some relief in the near term while SW Argentina is developing some heat stress in corn areas. The market will be watching for rain relief there in January.

Corn exports came in well above trade expectations at 67 million bushels, 81% higher than the four week average. Most of the shipments were to Unknown, Japan, Mexico, Columbia and Canada.

Even in the light of the supportive export news, corn finished the session lower 2 cents at 4.12 ¾ in the March contract while December ’15 lost 2 ¼ to close at 4.36 ¾.  

Soybeans

Light volume holiday trade played out today as January soybeans this morning traded 16 cents higher before selling off mid-morning and holding weakness the balance of the session. In the process, the January contract was able to post the highest price since November 13th.

While somewhat technically supported, the soybean complex continues to consolidate, unable to find clear direction. Bulls and bears trading cues from meal and soy oil.

South American weather continues to be light on market moving news with SW Argentina too dry and Southern Brazil too wet.

Floods in Indonesia and Malaysia supported the soy oil market as palm oil harvest, transportation and crushing are interrupted. Palm oil closed higher for its 8th consecutive session.

Exports came in at trade expectations with 23.4 million bushels of old crop.

Board crush margins continue to support the soy complex with them rallying .40 since 12/17 to near $1.50.

First notice day for January futures is this Wednesday.

Soybeans ended up closing January off 5 ¾ cents at 10.41 ¾ and November of ’15 closed down 41/2 at 10.24 ½.

Wheat

Support in wheat continues to come from Russian export duty uncertainty. The trade in general seems to feel confident that other sources will be able to pick up the shortfall from Russia for the near term deliveries. Russian exports are nearly 15.5 million tonnes through December 17th compared to the USDA projection of 22.0 million tonnes.

Russia has introduced grain export duties of no less than 35 euros/tonne starting Feb 1 to stabilize domestic prices.

Weather provided some support as well as the market anticipates a cold blast to work its way into the plains with the greatest production concern in Colorado, Nebraska and NW Kansas.

Wheat exports were average at 10.8 million bushels.

Even with the Russian and weather uncertainty, the market had a hard time holding on to early gains in the thin holiday trade but managed to find some support the final minutes of the session.  Chicago March closed up 4 ¾ at 6.15 ½, KC March was higher by 3 ½ cents at 6.47 ½ and March Minneapolis led the strength closing 5 ½ higher at 6.37.

Beef

Cattle held their strength today on renewed optimism in the cash market. Midday boxed beef was higher. Choice 245.37 +.85, select 236.44 +.83.

Feeders were the leaders – at midday touching the continued expanded limits of $4.50 on technical support and the gains in the cattle market.

Feb live cattle are currently trading 2.775 higher at 165.250 while Jan Feeders are trading 3.825 higher at 217.550.

Pork

Hogs hold modest gains following firm pork prices coming into the session and spill over from the cattle market. Midday mandatory FOB plant carcass 86.73 -.92.

As of this publication Feb hogs are .200 higher at 81.750 while June is .875 higher at 91.650.

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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