Walsh Commercial Hedging 11/29/12
Nov 29, 2012
The grains finished lower while the soybeans finished higher as optimism about the US averting the potential effects of going over the “fiscal cliff” was complemented by an agreement on a new debt reduction deal for Greece overnight. The wheat complex finished lower on profit taking and on export sales that didn’t support the idea that US wheat exports are picking up just yet; like last week’s impressive 657,400 MT number. Wheat exports were pegged at 279,300 MT, below expectations of 300-450,000 MT. The dry growing conditions in the Western Plaines took a back seat to the weak sales number today as traders took some profits off the table with the July Kansas City contract finishing the day only down 2 cents at $9.41. There are reports that some analysts are beginning to adjust HRW wheat production under 1 billion bushels. The short term forecast still looks bleak for the US Plaines, but longer term forecasts for next weekend are showing some hope. There’s a chance for some light precipitation forecasted from Nebraska into the Dakotas but again this is a long way off and I won’t believe until I see it. Like most of time, the lower trade in the wheat complex spilled over into corn with March corn finishing the day down 5 ¼ at $7.58 ¾ after another disappointing export number. March corn was on the verge of taking out its near term resistance level of $7.67 ¾ at 7:26 this morning but once the export numbers hit the wire at 7:30 March corn fell. Old crop sales of corn were pegged at 236,100 MT, well below market expectations of 400-650,000 MT. The corn bulls will turn their attention now to the wet weather conditions in Argentina which is causing planting delays. January beans finished up 2 ½ at $14.48 ¾. Export sales for soybeans were also below expectations coming in at 319,100 MT while the trade was expecting them to come in the range of 500-700,000 MT. However, the report revealed higher than expected sales for soy meal which came in at an impressive 365,100 MT, up 85% from the previous week. The trade was looking for meal sales to come in at just 100-250,000 MT. The USDA also confirmed the recent bean oil sales in the last week. They reported bean oil sales at 121,500 MT for delivery in the 2012/13 marketing year that ends next September. The impressive sales of bean products verifies the world demand for these products are still incredibly strong and should stay that way until South America can get their soybeans to port and shipped without any delays and in my opinion won’t happen without some hiccups along the way which means the US is the main player in town which should support soy products well into 2013.
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