Good Morning! Paul Georgy with the early morning commentary for December 14, 2015 at 5:15 am.
Grain markets are slightly higher in a narrow trading range. Crude oil continues its slide as it falls below $35.00 a barrel. The US Dollar is higher as the FOMC meeting is only a few days away.
December 15, 2015: Join us in our next webinar for a look at how South America's economy will impact US grain prices. Register Here. Allendale's Rich Nelson will be joined by CME Group's Blu Putnam to discuss the recent election, currency and economic issues in South America and how US grains could be impacted. Join us free, here.
As the trading year comes to a close volume has a tendency to be reduced, however, this week there seems to be a lot of moving parts that could have an impact on the agricultural markets. Most of the impact will be coming from Washington. Congress will be leaving for holiday vacation on Friday and there are several bills on the docket that need a vote this week. The blender’s credit for bio diesel could have an economic impact on soyoil. The FOMC decision on interest rates should come on Wednesday. Trade is waiting for Argentina’s new president to put in effect the cut in export taxes. China is also allowing the Yuan to fluctuate causing Chinese buyers to lose purchasing power. Weather in South America is not a problem currently for growing crops but will be watched closely by the trade. Bottom line, expect choppy trade which could push markets out of current trading ranges.
Weekly CFTC Commitment of Traders report showed managed money funds covering some of their net short positions. They were net buyers of 13,394 contracts in corn leaving them net short 64,746 contracts. In soybeans they bought a net 23,653 contracts to be net short 11,115 contracts. They remain near record short 70,980 contracts in wheat covering only 6,344 contracts.
Funds were estimated to have been net sellers of 7,000 corn contracts, 7,000 in soybeans, 3,000 wheat, 1,000 soymeal and 4,000 soyoil contracts on Friday.
The USDA's Animal and Plant Health Inspection Service (APHIS) said it will require developers to apply for a permit for field trials involving biotech wheat planted on or after Jan. 1. This is a more stringent process than such trials being authorized by notification, which has been in place since 1997.
The Rosario Exchange said it expects Argentine wheat production to increase to 9.6 mmt versus their last estimate of 9.4 mmt. They also raised the wheat planted area to3.45 million hectares from 3.4.
Livestock markets are dealing with the oversupply of meat available to consumers currently. A factor that is being watched closely is feedlot conditions. Due to the moisture in the form of rain, snow and ice, rate-of-gain could be reduced. Look for more sideways markets with high volatility this week. Feb cattle have technical resistance at 127.50 and support at 122.37.
Dressed beef values were lower with choice down .58 and select down 2.04. The CME Feeder Index is 157.79. Pork cutout values are up .47.
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