March corn prices were up 13¢, with new-crop corn prices up nearly 4¢ for the week ending Dec. 23. March soybean prices were up 1.5¢ and new-crop soybeans were up nearly 5¢. Old-crop wheat prices were up 20¢ to 30¢.
This week, wheat prices were the big mover, likely on the drastically cold U.S. weather, says Jamie Wasemiller, market analyst for Gulke Group.
“From a daily standpoint we saw green almost across the board except for the U.S. Dollar, which is OK for agriculture and hogs which failed to take out its previous day’s highs in the front months,” he says. “We like to say that it is important how we end the week, but it may be more important how we start next week coming off a three-day weekend but today psychologically was a good thing.”
The market will be very anxious, he says, to see how the weather scenarios in both the United States as well as in South America play out.
Currently the market fundamentals are not a major impact, Wasemiller says. So, he’s keeping a close eye on technical/chart indicators.
“Corn finally closed above $6 in the December contract on Wednesday for the first time since Dec. 1 and have managed to stay above that level the rest of the week,” he says. “In the latter part of November, $6 was a support level for corn. We are maintaining an upward channel in the corn complex, and it has almost recovered half of its losses from its recent move down from early October to early December.”
For soybeans, Wasemiller says the market has been in a long-term ascending triangle, which indicates a coming breakout to the upside.
“But only if we can muster the strength to get past $14 in March and $15 in November,” he says. “Unfortunately, we have tried and failed numerous times recently. Both contracts would look very good if new high closes for the week would occur but that is a tall order with three-day weekend in South American weather.”
Meanwhile, wheat has had the benefit of one of the worst cold outbreaks in decades but could not muster an explosive week.
“The weather looks to reverse and warm up next week,” Wasemiller says. “It is very difficult to ascertain weather damage this time of the year. Tuesday trade will be a good indicator.”
Wasemiller is keeping a close eye on exports right now. He provides this snapshot:
- Corn: Exports were down 48% YOY with export inspections down 30% YOY.
- Soybeans: Up 4% YOY with inspections down 9% YOY. We need to maintain this as our window for selling beans to China generally has an expiration date before SA comes back online.
- Wheat: Down 8% YOY with inspections down 2% YOY.
- Soybean Oil: Down 93% YOY which is a huge obstacle this market will have to overcome.
- Soymeal: Down 3% YOY with expectation for this to rise IF Argentina’s soybeans crop has been hurt as bad as some say.
Other Markets of Note
Wasemiller says January, February and March natural gas all posted a daily key reversal down yesterday and continues to struggle to find a bottom.
“Technical signals point to continued weakness in the market,” he says. “Weather forecasts point to increase usage over the weekend but next week temperatures in the U.S. appear to be much better.”
Crude oil is continuing its rise to try and get above $80 a barrel.
“It currently is at about a 50% retracement of its recent move down and is just under the 50-day moving average with a long MACD which is all positive news,” he says. “This market will continue to be a supply & demand tug of war.”
Also, the U.S. dollar continues its move down. On a weekly chart It is approaching about a 50% retracement of its move from $90 to $114 and is hovering right around the 50-day moving average
“All in all, I feel there are some positive outlooks moving forward at the moment,” Wasemiller says. “I feel the technicals have done their part in the absence of fundamental information. Post-Christmas trading will be important as it sets the tone for traders even with a general lack of new information.”
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