Argentine Weather Concerns Build

December 26, 2011 11:59 PM

What Traders are Talking About:

* Hot, dry outlook for Argentina. Weather concerns in Argentina and southern Brazil heightened last week. Based on the current forecast, Argentine crops will remain stressed. Hot, dry conditions are expected over the 10-day period after a brief period of cooler temps during the holiday weekend. In Brazil, temps are expected to be cooler than normal this week, but rainfall chances are limited in dry southern production regions.

The long and short of it: Argentine weather remains the focal point for corn and soybean traders. Crop stress is causing private crop watchers to cut their production forecasts.

* Window dressing likely. The final four trading sessions of 2011 are likely to include plenty of "window dressing" as funds will try to make themselves look as good as possible. Typically, window dressing is associated more with the stock market, but it also impacts commodities.

The long and short of it: If there's active window dressing, it may be difficult to sustain price strength seen in grain markets last week.

* H&P Report: neutral to slightly negative. Last Friday's Hogs & Pigs Report was generally neutral to mildly negative, based on the pre-report trade guesses. USDA's survey work showed hog numbers are slightly higher than expected, although farrowings are not expanding.

The long and short of it: Hog futures rallied Friday after the data was released, suggesting traders already had the report factored into the market.


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