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EHedger Afternoon Grain Commentary 12/19/12
Dec 19, 2012
Grain and oilseed markets finished sharply lower at the CBOT this afternoon. March corn was 17 cents lower at $7.03, March soybeans 29 ½ cents lower at $14.31, and March wheat 5 ½ cents lower at $8.05 ¾.
Follow through weakness from yesterday, bearish ethanol data, and technical indicators contributed to today’s weakness. We had a build in ethanol stocks to 20.8 mln bbl which was also bearish for corn. Large stop orders were triggered below the recent March corn lows and we settled below the 200 day moving average (front month chart). A break below $7 could mean corn is poised to fill its gap from the 4th of July (see chart).
Front Month Corn
Fundamentally we did see some supportive news for wheat. The USDA announced that Egypt purchasing 110,000 MTs of US HRW wheat while Egypt’s GASC also announced the purchase of 180,000 MTs of SRW for Feb shipment. US wheat is once again competitively priced in the world and could find support for this reason. Wheat finished lower today mainly due to flow over weakness from the corn and soybeans.
Informa released their latest 2013 acreage estimates putting corn at 99.026 million acres! They lowered soybean acres to 78.926 and put winter wheat at 42.198 million. This may have added a little extra pressure on new crop corn prices today. No major changes were noted for the US or South American forecasts during the next 5 days.
Friday will be the last trading day for January grain and oilseed options. We will be open on Christmas Eve until noon and closed Christmas Day. Markets will reopen on the 26th at their usual morning open-outcry times. We expect low volume and choppy trading over the next two weeks as many traders are out for vacation. For a free two week trial of our services please click on the sign-up link below. Have a great week!
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