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A New Month Brings In New Buyers

Published on: 11:54AM Dec 02, 2015

Good Morning! Paul Georgy with the early morning commentary for December 2, 2015 at 5:15 am.

Grain markets are slightly higher on bargain hunting attitude and early month buying. Outside markets are providing headwinds as the US Dollar is higher and crude oil lower.

Stats Canada will release the government’s estimate for 2015 crop production on Friday December 4th. Traders are looking for an increase in wheat and canola production due to beneficial late season rains.

Join us in our next live webinar December 15th at 8:00 PM CST for a look at how South America's economy will impact US grain prices with CME's Blu Putnam. Register Here.

The EPA surprised the grain trade by releasing biofuel mandates that were higher than its May 29 proposal. Total biofuel blending will run from 16.28 billion gallons in 2014, 16.93 in 2015, and 18.11 in calendar 2016 (May proposal 15.93, 16.30, and 17.40). Advanced biofuel blending will be 2.67 billion gallons in 2014, 2.88 in 2015, to 3.61 in 2016 (May proposal 2.68, 2.90, and 3.40). This leaves the amount for conventional ethanol from corn at 13.61 billion gallons in 2014, 14.05 in 2015, and 14.50 in 2016. The May EPA proposal was 13.25, 13.40, and 14.00 respectively.

(Reuters) - U.S. biodiesel production fell to 107 million gallons in September from 123 million gallons a month earlier, the U.S. Energy Information Administration said in a report on Tuesday. Soybean oil remained the largest biodiesel feedstock, with 390 million lbs used in September, or about 49 percent of the total. In August, soyoil used in biodiesel production was 464 million lbs.

Ukraine’s agriculture ministry said their 2015 grain harvest is 99 percent complete, farmers harvested 60 million tonnes of grain of which 27-28 million tonnes was wheat and 22-23 million tonnes was corn. In 2014 they harvested 63.8 million tonnes.

Funds were estimated to have been net buyers of 6,000 soybean contracts, 3,000 corn, 2,000 soymeal, 6,000 soyoil and sold 4,000 wheat contracts.

USDA will release a report at the UN Climate Conference in Paris today. The U.S. Department of Agriculture's new report will be titled Climate Change, Global Food Security, and the U.S. Food System. This report will outline the impacts of climate change on global food security, including food availability, access, utilization, and stability.

EIA report this morning is expected to show the first decline in U.S. oil inventories in 9 weeks. The market consensus for this report is for a 900,000 bbl. decline in crude oil inventories, a 1.5 million bbl. rise in gasoline inventories, a 500,000 rise in distillate inventories, and a 0.5 point rise in the refinery utilization rate to 92.5%.

Large supplies of competitive meats continue to be the driver of lower cutout values for beef and pork. The heavy weight cattle that still have to go to market is applying the pressure of fed cattle prices. The livestock futures had an up day on Tuesday as short covering by funds, hopes of higher product and an improvement in cash prices were the key drivers. The futures rally relieved the oversold condition and volatility will continue to be high.

Dressed beef values were lower with choice down 1.84 and select down 2.17. The CME Feeder Index is 174.05. Pork cutout values are down .89.

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