EHedger Afternoon Grain Commentary 12/17/12

Published on: 16:32PM Dec 17, 2012

CBOT markets were stronger overnight but failed to hold onto their early gains.  Volume during the day session was rather low and the lack of fundamental news was evident.  We did see a sale of soybeans to "unknown" but it was already priced into the market.  Poor soybean export inspections were noted for soybeans while corn and wheat were slightly better than expected.  March corn closed 6 ¾ cents lower at $7.24, January soybeans up ¼ of a cent at $14.96 ¼, and March wheat 6 cents lower at $8.08.

Weather in South America still looks mostly favorable with the exception of a few dry sections of Brazil.  It has been soybean demand driving price lately and it appears the funds have recommitted to long soybeans.  Looking at Friday’s commitment of traders report we saw 8,971 new longs and 7,643 less shorts for a net change of +16,614 contracts of beans.  While they are adding to their long soybean positions they are liquidating a large portion of their corn longs.  Between Wednesday December 5th and Tuesday December 11th, the managed money liquidated 37,398 of their long holdings and increased shorts by 16,074 contracts for a net change of -53,472 combined futures and options!  This is very evident when looking at how much soybean prices have gained on corn during this timeframe (see chart).

January Soybeans-March Corn RatioSoybean-Corn Ratio

Precipitation is expected to improve in the next 10 days in the US.  A large system will impact much of Kansas and sections of Oklahoma and Texas bringing up to 6" of snow.  With normal precipitation expected wheat markets are continuing their technical move lower.  Today is the first day March wheat has settled below its 200 day moving average since June 19th 2012.

March Chicago WheatMarch Chicago Wheat

Friday will be the last trading day for January grain and oilseed options.  We will be open on Christmas Eve until noon and closed Christmas Day.  Markets will reopen on the 26th at their usual morning open-outcry times.  We expect low volume and choppy trading over the next two weeks as many traders are out for vacation.  If you have been waiting for a chance to price grain having hopeful orders above the market may not be a bad idea during this timeframe.  For a free two week trial of our services please click on the sign-up link below.  Have a great week!

Best Regards, 



Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources. The market information contained in this message has been obtained from sources believed to be reliable, but is not guaranteed as to its accuracy or completeness. Market information may not be consistent with current or future market positions of EHedger LLC, its affiliates, officers, directors, employees or agents.