Corn – Open interest suggests active fund selling yesterday, looking like pre selling the Jan crop report
↓ Open interest was up 23K yesterday which suggests there was active fund selling
↔ Given no real change to the current fundamentals this fund is selling looks like pre-selling of the
upcoming January crop report, difficult to tell which factor they feel will be bearish
↔ Corn exports through last week continue at a pace that is 1% above USDA expectations which means
we expect a slight increase from the USDA on exports on the Jan crop report
↔ Yield estimates from the USDA were not changed much to and last year giving the impression they
were confident with the current number that they are using of 174.9
Beans – Slight increase to ARG 1 – 5 day rains this morning, solid BRA rains days 6 to 10
↓ Morning maps have a slight increase to ARG rains days 1 to 5 and very solid rains BRA days 6 to 10
↓ Starting in the 6 – 10 day outlook will see SA forecast maps that look out to the key reproductive
phase (similar to August in the US), for now those maps suggest moderate to solid rains
↔ Seasonal exports will now be expected to fall to 500K – 800K, we are past the timeframe where a
minimum of 1000K is expected to meet normal levels, also fewer 8 AM sales are now required
↓ An open interest increase of 12K may also suggest fund of pre-selling of the Jan crop report
Wheat – Selling also seen in this market as well yesterday, March CHI at the bottom end of its range
↓ Selling also seen in wheat with an open interest increase of 6K, a possible sign that after recent light
short covering funds returned as sellers to start the year yesterday
↔ Like corn, current fundamentals are unchanged and mostly neutral suggesting any selling right now
could be more tied to simply starting the year or pre-trading the Jan crop report
Cattle – BB aggressively lower, showlist higher suggests potential for lower cash this week
↔ Yesterday’s PM BB was choice -5.37 select -1.47 packer BE at 172.47, packer cushion $0.19
↔ Last week’s average cash trade was +1.56, very close to a level that would have been expected
↓ Yesterday’s BB continued lower making the 4
th lower BB report in a row and now has given back
100.5% of the BB bounce seen over early to mid-December
↔ Even after yesterday’s bounce, futures keep a cautious cash assumption priced in with Feb assuming
a level about $1 lower than cash, understandable given BB moved to new 11 month lows yesterday
↔ First quarter of the year is time of year to expect a seasonal bounce, that is only likely to happen if
BB is steady or moves higher, right now it is making new significant lows