December 27 Afternoon Comments

By ADMIS Research


March soybeans traded unchanged at 883 at mid-day sliding off the early session high at 889. The market did trade as low as 880 ½ the lowest level since November 27th. March soybean meal was up 0.50 cents at $308.40 and March soybean oil was up 0.07 points at 27.72 at mid-day. News that the US and China officials may meet in the first week of January to work on trade issues was somewhat supportive. However, reports that President Trump is likely to sign an executive order in the next few weeks that will bar US companies from using telecommunications equipment from China’s Huawei and ZTE corporations is concerning for a long term trade deal between the two countries. Brazilian weather continues to be debated with a major weather analyst calling for a reduction in Brazil’s production due to hot and dry conditions in Parana, Mato Grosso do Sol, Goias and Mato Grosso over the last three weeks. Maturity of the crops has been pushed which may shave yield potential to 116.8 million tonnes down from the latest USDA estimate of 122.0 million tonnes. The forecast calls for increased rains over the next two weeks with temperatures moderating. The open interest in soybeans went down 11,873 contracts on Wednesday with soybean meal down 1,138 contracts and soybean oil down 771 contracts.

soybeans futures chart


March corn is slightly higher trading up 1 cents at 374 ¼ into the mid-session. The market has traded inside yesterday extension down range so far and is lacking any fresh news. There are reports that a US government trade delegation will travel to Beijing the week of January 7th to hold trade talks with China officials which is a positive development. China could eventually emerge as a buyer of US corn, DDG’s and ethanol. The EIA should release ethanol production numbers on Friday, with the market concerned of late with very poor margins and building stockpiles. Last week’s stocks were 23.87 million barrels up nearly 7.0% from a year ago and to an eight week high. The open interest in corn went down 2,837 contracts on Wednesday.

corn futures chart


Wheat markets continued to push lower with Chicago March wheat trading down to 507 ¼ down 2 ¾ cents at mid-day and Kansas City March trading down to 492 down 3 ½ cents. Weakness was tied to the Russian Federal Statistics Service estimate for the 2018 wheat harvest at 72.1 million tonnes, which would be the third largest crop but down 16% from last year’s record 85.0 million tonnes. Still, the estimate tops other projections with IKAR’s at 71.5 million tonnes, SovEcon at 70.9 million tonnes and ProZerno at 70.8 million tonnes. World wheat exporters have waited for Russian sales to slow for a chance to grab market share in the second half of the 2018-19 marketing year. However, the latest crop estimate creates the potential for bigger exports from Russia. Matif March futures are down 0.73% trading down to the lowest level since December 10th. The open interest in Chicago went up 1,352 contracts on Wednesday and Kansas City went up 1,513 contracts.

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2018-12-27T22:07:07+00:00 December 27th, 2018|