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Yesterday was a pleasant way to begin the post-Christmas trade (sans wheat), and it would appear that we may not be done with the buying just yet. The grains are hesitating a bit this morning, and obviously, there is little concern of winterkill in the wheat. Beans though have extended gains once again advancing to the highest level in the past six sessions and now testing the 13-day moving average for the first time since the 8th of this month. Possibly more important though is we sit on the cusp of turning short-term technical indicators higher from as oversold a position as they have been since August. Are the technical indicators trying to tell us something that fundamentals have yet to?
Argentina did receive rains over the weekend which has improved the outlook, but the forecast is still a bit spotty moving forward. It is currently estimated that bean planting is 71% complete, which is still around 5% behind a year ago and of course, there is plenty of growing season (risk) ahead.
Yesterday we did have an announcement of 134,148 MT of corn to Mexico, and it is beans turn this morning. China purchased another 110,000 MT of beans.
While it should come as no shock, overall news is relatively quiet this morning as we mark down to the final few days of 2017. That said, the final crop production report is just 16-days away, and we should begin to see the focus shift to this shortly after the calendar rolls over.
One last note, we do find the U.S. Dollar continuing under pressure so far this week, and while we have not extended through the low posted right around Thanksgiving, seeing that weekly indicators have turned lower, we appear to be headed in that direction. This is a market that bares watching as we enter the new year as if it does extend lower, not only could it provide a nice psychological boost for commodities, it may be a precursor to tops in other high flyers such as the equity markets.
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