Will Fed Taper QE3?
Dec 18, 2013
Good Morning! Paul Georgy with early morning comments for December 18, 2013 at 5:00 am.
Grain futures are mixed as we see some back and fill attitude this morning.
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Traders are cautious ahead of the US Federal Reserve’s announcement of meeting minutes at 1:00 pm today. A newswire survey of traders and analysts suggests about 40% are expecting some tapering of QE3.
Hopes of improving demand seem to be the driver in corn and soybean markets. South Korea said they will take corn earlier than previously committed which helps exporters deal with corn rejected by China.
Midwest basis is drifting lower as futures prices rally. Cash grain buyers are reporting a pickup in soybean movement yesterday when Jan futures hit 13.50.
Weather forecast for South America is a little dryer however that will be needed to finish up planting.
Wheat futures remain under pressure as wheat buyers turn to EU for supply. The US wheat is overpriced compared to EU and Russian supplies.
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Secretary Vilsack will be meeting his Chinese counterpart on Friday for their annual meeting. One would have to expect some discussion on the rejections of US corn imports.
Soybeans remain in a trading range between 13.00 and 13.50. March Corn has support at 4.18 ½. Seasonal traders are expecting a rally from Christmas to New Year in corn.
Index fund rebalancing is expected to start in early January.
Beef cutout values were mixed with choice down 1.54 and select up .37. Pork cutouts were down .11. Demand for product during the holiday season is slow as specialty items are featured. Look for choppy markets as traders are in the holiday mode.
Markets as of 5:00 AM
- Mar Corn + 1/4
- Jan Beans +2
- Mar Wheat -3 3/4
- Feb Cattle +.10
- Feb Hogs +.67
- Mar Dlr +.02
- Mar S&P +6.25
- Jan Crude +.08
- Feb Gold +.80
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