Blogging by the Bushel
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Market Report

Tuesday December 26th, 2017

March 17 corn closed up ¾ at $3.52 ¾ and July 18 closed up ¾ at $3.69 ½. January 18 soybeans closed up 9 ¾ at $9.59 ¼ and March 18 closed up 10 ¼ at $9.70 ½. March wheat closed down 2 ½ at $4.22 ¼ and July 18 closed down 1 ½ at $4.48 ½.  Crude oil closed up $1.46 at $60.00.

The corn market was quietly mixed today, trading both sides of unchanged. The market ultimately finished less than a $.01 higher, with less than 100,000 contracts traded, even when including spreads. The funds were viewed small net buyers today, as they hang with a net short of over 240,000 combined futures and options. Some speculate they may be looking to trade some of those in toward year’s end as bonus season approaches?  Cash trade was similarly quiet, with many taking an extra day off. South American weather was mostly beneficial over the weekend, though the probable return to “hot and dry” in Argentina next week likely helped keep the bears at bay. The “heart” of Argentine growing areas received the forecasted inch plus, but the outlying northern and southern rump areas generally went without. A little more follow-up is expected for the SW of Argentina yet this week, but that could be “it” for a moment as a dryer trend prevails into next week.

Soybeans saw their overdue corrective rally today after a multi week $.68 slide from the December high to low. That break left the daily charts deeply oversold and due for a clean-up trade particularly in light of the CFTC data showing funds were heavy sellers and vulnerable to short covering.  Trade volumes were very light. Fresh fundamental news of significance was lighter. In South American weather, weekend rainfall totals were solid including broad 1.5 to 2.0 inch rains across Southern Brazil and a nice shot of 1.0 inch+ rains in Cordoba stretching up into parts of the NW with lighter totals elsewhere. A drier and hotter outlook is seen for this week although we don’t completely turn off the spigot with additional rains seen over the coming weekend but the overall pattern appears to be turning more stressful. The feature trade was the rally in soybean oil which finally appears to be showing some stability against its fall low along with the oil share spread which firmed into a new multi-week recovery high. Soybean oil was following the lead of palm oil where we stuck a 2% rally to build off last Friday’s reversal trade which suggests we have fallen far enough for now.

The wheat complex came back from its long Holiday break with a slightly better start to another abbreviated week. The gains were not very lasting. Late in the day when corn prices moved into new highs values in wheat tried to firm, but trade was unable to come all the way back and weakened into the close. The early strength in both the SRW and HRW wheat markets was not enough to take out last Friday’s highs, thus the streak of posting higher highs ended today at seven straight days. News overnight/this morning was mostly non-influential, however the huge Indian wheat crop continues to impress. Egypt’s GASC announced after today’s close they were in for wheat for Feb 1-10 shipment. Their last purchase was back on Dec 12 when they bought five cargoes (4 Russian and 1 Romanian).

Anna Kaverman

anna@mercerlandmark.com

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