Can Wheat Close At New Contract Lows Again?
Dec 20, 2013
Good Morning! Paul Georgy with early morning comments for December 20, 2013 at 5:00 am.
Grain futures are mixed in a quiet trade. Corn and wheat are lower while soybeans are higher.
The March wheat contract has closed at new contract lows 7 out of the last 8 trading sessions. It opened at new contract lows overnight. World supply and liquidation of the long wheat/short corn spread that had been popular up until a few weeks ago is causing some of the pressure. Argentina raised their wheat production estimate from 8.5 to 9.0 mmt. The Argentine government has not given approval to resume wheat exports. Technical indicators are showing oversold and position squaring could happen at any time, manage your risk.
Traders are definitely in the "holiday mode". Volume was respectable yesterday at the CBOT however most of the volume was in the soybean complex. Demand for soybeans and the logistical issues are the recirculating news items.
Export sales were above trade expectations for corn and wheat while soybeans were lower than expected. Soybeans, for this marketing year, are 97% sold versus a normal sales pace of 73%.
Basis levels at the Gulf are steady for soybeans and a little weaker for corn. Midwest basis for soybeans slipped about 5 cents at most locations.
The South American weather forecast remains the same however some models are suggesting a drier trend developing which is creating some short covering in corn and soybeans.
On the economic front, existing home sales declined for the third straight month. Today we get 3rd Quarter GDP at 7:30 am.
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We will get the Cattle on Feed Report this afternoon at 2:00 pm. Trade guesses are: On-Feed 95.4% Placed 100.4% and marketings 96.7% of year ago. Cash cattle traded in the South at 130 yesterday. The same near-term demand issues and shortened work weeks continue to weigh on cattle and hog futures markets. Beef cutout values were mixed with choice down .47 and select up .40. CME Feeder Index is 166.90. Pork cutout values are 2.59.
Markets will close early on Tuesday and resume trading on Thursday morning at 8:30 for grains and 9:05 for livestock.
Everyone at Allendale would like to wish all readers, customers and friends a Happy and Safe Holiday!
Markets as of 5:00 AM
- Mar Corn -2 1/4
- Jan Beans +3 1/4
- Mar Wheat -2
- Feb Cattle +.25
- Feb Hogs -.27
- Mar Dlr +.03
- Mar S&P +2.25
- Feb Crude -.24
- Feb Gold +1.80
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