Holiday Trade Leads to Volatility
Nov 26, 2013
Good Morning! Paul Georgy with early morning comments for November 26, 2013 at 4:45 am. Grain futures are lower on profit-taking ahead of the holiday.
Rumors continue to circulate as traders try to find a good reason for the rally in soybeans. The best explanation maybe technical buying when resistance levels are broken. There also have been reports of end-user purchases as they fear for higher prices. Farmer selling has picked up a little in soybeans but most bin doors are closed until next year. Producers are telling us that they will not move corn until they see a price rally.
The USDA says farmers have 95% of corn harvest completed. The last crop progress report for 2013 puts the US winter wheat crop at 62% G/E compared to 33% G/E last year.
Funds were big buyers of another 7,000 contracts of soybeans and bought 6,000 contracts of corn.
Weather conditions in Argentina and Brazil, as reported by the forecasters we follow, are ideal for the young crop. South American farmers are struggling with insect problems this year which could affect population and ultimately yield.
Wheat tenders are plentiful this week and US wheat is getting more competitive. We will be watching for announcements from the USDA at 8:00 am.
First notice day for deliveries against the December contract at the CBOT is Friday. Traders are not expecting big deliveries in corn, wheat and meal as cash is premium to futures. However there have been surprises on delivery day, stay in contact with your broker on how you might handle the risk.
Cattle traders are waiting for some sign of cash trade this week. Packers should need more cattle for a full work week therefore trade is expecting a steady to better price. Retailers should be looking to refill coolers for first of month feature of beef and pork. Beef cutout values were sharply higher with choice up 2.40 and select up 1.46. The CME Feeder Index is 164.53.
Lean Hog futures struggle with the short work week and record high hog weights. As we approach December, slaughter numbers should decrease due to the effect of PEDv. Pork cutout values were down .50 on Monday. Markets have regular hours on Wednesday, closed on Thursday and will reopen on Friday morning. No Globex Ag markets on Thursday night. The Allendale Wake-Up Call will not be produced on Friday Morning. Call us with any questions at 800-262-7538.
Markets as of 4:45 AM
- Dec Corn -4 1/4
- Jan Beans -1 3/4
- Dec Wheat -4 1/4
- Dec Cattle +.07
- Dec Hogs +.12
- Dec Dlr -.18
- Dec S&P -1.00
- Jan Crude +.45
- Dec Gold +9.20
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