Corn – Limited fresh news keeps March in the range, volatility could slow even more to end of year
↔ There has not been much for fresh 8 AM sales reports recently which is limiting news and slowing
movements lately, recent strong exports has raised the range trade slightly now at 480 – low 490’s
↔ Trade volume and movement likely to slow even more as the end of the year approaches
↑ There could be a supportive bias if funds cover a few more of their 161K shorts before end of year
↑↓ As long as corn can maintain a moderate to slightly strong export pace we may see the USDA raise
exports another 25 mil bu on the January crop report, ethanol may need to be lowered 25 mil bu though
Beans – The small 8 AM sale to unknown yesterday has some thinking China will be back with buying
↑ Yesterday’s support came both from seeing small 132K sales at 8 AM which now has some in trade
believing that China will be back for a solid streak of 8 AM sales again
↓ The continued price difference between BRA and the US suggests that a sustained streak of sizable
China buying should not be expected with BRA still at a significant discount
↔ SA weather shows active rains for ARG days 1 – 5, then active rains for BRA days 6 – 10
↔ Friday’s crush report will be expected strong, could see some pre-buying later in the week
Wheat – Most in trade feel that the recent China buying will now slow again, news to slow as a whole
↔ Most feel that China has made all the recent purchases that they need to, 8 AM sales are not
expected now, recent purchases should keep values above what they were before the China buying
↔ March CHI was 556 before the China buying, spiked to 649 ½ and may now level off near 600
↔ Exports besides China are still likely to be the #1 influence going forward and should be watched
Cattle – BB finally improved, showlist -12,900, the first 2 positive signs seen in weeks
↔ Yesterday’s PM BB was choice +2.42 select +1.64 packer BE at 174.62, packer cushion $3.64
↑ The first 2 positive signs were seen yesterday for the first time in weeks with BB higher and also
seeing the showlist moderately lower
↑ Speculators were quick to be on the buy side as some are willing to risk $3 - $5 for the chance to see
up to a $10 bounce if this first piece of positive news turns into a lasting recovery
↔ We have to caution that after 2 months of lower BB seeing a single day higher does not yet suggest a
fundamental improvement, speculators may by now but the fundamentals need at least 3 days higher
↔ With packer profits above $3 and seeing the lower showlist we may expect a $1 higher cash trade
↔ After yesterday’s bounce the futures of our still priced $5 under last week’s cash trade