Can Corn Grind Through Resistance?
Dec 04, 2013
Good Morning! Paul Georgy with early morning comments for December 4, 2013 at 5:00 am. Grain futures are mixed as China cancels more corn shipments and Paris wheat sets a six month high.
Corn futures are giving back some of yesterday’s gains on China’s rejection of more corn after finding it contained an unapproved GMO variety. Corn also is backing away from an important chart point in the March Contract.
Traders have been shying away from buying nearby soybean futures as there is concern that China may cancel some cargoes. Our research suggests they could but probably not for several weeks. China will likely wait until they are more confident that South America has a bean crop.
World Weather Inc. is expecting favorable weather for much of South America over the next 2 weeks.
Soybean crush margins remain positive in US, South America and China on good meal demand.
Corn basis levels were steady to higher as the rally stalls movement. Year end tax planning and hopes of higher prices contribute to farmer’s decision making.
There were no deliveries on the December corn and December meal. December wheat had another 607 contracts delivered partially through 12/2/2013.
Stats Canada’s report is out later this morning. The Argentina Ag Ministry reduced their wheat production to 8.2 mmt from the last estimate of 8.5 mmt. Informa kept their estimate the same at 9.8 mmt and USDA will give us their number on Dec 10 versus the last estimate of 11 mmt.
Farm bill negotiators are expected to meet today to try and break the deadlock over food stamp cuts and subsidizing crop insurance.
Funds and technical selling is attributing to the sell-off in lean hog futures. Weaker cash markets are not helping trader’s attitude with several dollar premiums of futures to cash index. Pork cutout values were down .54 to 90.99.
Cattle futures held support however traders are talking about near record highs of product. Can it sustain these levels going into holidays? Beef cutout values were lower on Tuesday with choice down .06 and select down 1.53. The CME Feeder Index was 166.53.
Markets as of 5:00 AM
- Mar Corn -2 1/4
- Jan Beans +2 3/4
- Mar Wheat +1 3/4
- Feb Cattle -.02
- Feb Hogs -.02
- Mar Dlr +.04
- Mar S&P +1.75
- Jan Crude +1.14
- Feb Gold -8.50
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