Chinese Data, Weather Supportive To Open The Week

December 8, 2013 11:53 PM

What Traders are Talking About:

Overnight highlights: As of 5:45 a.m. CT, corn futures are 1 to 2 cents higher, soybeans are 3 to 4 cents higher and wheat futures are 1 to 3 cents higher. The challenge today will be to maintain the modest overnight price strength through the daytime session. Live cattle and lean hog futures are expected to open with a modestly firmer tone on support from weather.


* Chinese soybean imports surge in November. Chinese importers took advantage of new-crop U.S. supplies and imported 6.03 MMT of soybeans last month, according to official customs data. That was a 43.9% increase from October. For January through November, China imported 55.97 MMT of soybeans, up 6.6% from year-ago. Meanwhile, China's trade surplus widened to $33.8 billion in November from $31.1 billion the month prior. Chinese exports rose 12.7% over year-ago, while imports increased 5.3% in November.

The long and short of it: The data is price-supportive for soybean, though traders already knew Chinese soybean imports increased significantly last month. The trade data is friendly for the commodity sector.

* Chinese inflation eases in November. China's Consumer Price Index (CPI) came in at 3% above year-ago in November, down from a 3.2% increase in October. Food prices rose 5.9% over year-ago last month, while non-food prices firmed 1.6%. Through the first 11 months of this year, China's CPI is 2.6% above year-ago, well below the Chinese government target of 3.5%.

The long and short of it: The Chinese inflation data, coupled with the trade data, is supportive for commodity markets as it signals easing inflation and a strengthening economy.

* Wintry weather arrives. The country's midsection was blanketed with snow/ice late last week and over the weekend. On top of that, bitterly cold temps are forecast for this week. While snow/ice-covered roads will temporarily slow livestock and grain transportation, it's the bitterly cold temps that are likely to have a greater impact. Livestock weight gains will be slowed by the arctic air and the winter wheat crop is susceptible to winterkill, especially if the deep-freeze conditions linger.

The long and short of it: The wintry weather is mildly price-supportive, though winterkill concerns for the winter wheat crop are limited as the snow/ice the country's midsection received will help insulate the crop from the bitterly cold conditions.


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