Afternoon Grain Commentary 2018-08-29T18:26:48+00:00

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December 11 Afternoon Comments

By ADM Investor Services Research Team

SOYBEANS

January soybeans finished Wednesday’s session with a moderate loss after closing higher for six sessions in a row as its December rally ran out of steam. In addition, Wednesday was the first session that the soybean market was able to take out the previous session lows during that rally. Talk that the market has moved up “too far, too fast” helped to spark some selling, while there are increasing concerns about the longer-term demand from China given the expectations for a record crop from Brazil. The USDA announced a sale of 585,000 tonnes of US soybeans to China, the largest sale in more than eight months. The USDA also announced a sale of 140,000 tonnes of US soybeans to unknown destination. Ag Secretary Perdue said that China lifting tariffs on US soybean exports was a signal of progress on agricultural trade. March soybean oil is trading moderately lower on the day as it also ended a 6-session winning streak as the market was pressured by news of an 8% monthly drop in Indonesian palm oil exports. March meal extended its recent pullback as it dropped down to the lowest level since December 4th.

CORN

March corn broke out of its recent consolidation to the downside as it took out the November lows and reached the lowest level since September 12th before finishing Wednesday’s trading session with a moderate loss. Fund sellers seem to have remained active in the corn market with open interest creeping higher over the past week. In addition, carryover pressure from the wheat market helped pull the market lower early. There were 79 deliveries against the December corn contract. There was widespread rain over South African growing areas that have eased dryness concerns with their current corn crop. Ethanol production for the week ending December 6th averaged 1.072 million barrels per day. This is up 1.1% vs. last week and up 2.5% vs. last year. Total Ethanol production for the week was 7.504 million barrels. Corn used in last week’s production is estimated at 107.5 million bushels. Corn use needs to average 103.8 million bushels per week to meet this crop year’s USDA estimate. Stocks were 21.815 million barrels. This is up 5.7% vs. last week and down 4.7% vs. last year.

WHEAT

March wheat stayed on the defensive as the selling pushed the market down to the lowest level since November 22nd before it finished Wednesday’s trading session with a moderate loss. In contrast, March Kansas City held within an inside-day range before ending the day near unchanged level. There were no deliveries against the December Chicago wheat contract and one delivery against the KC December contract. The huge discount of Kansas City wheat to Chicago wheat helped to provide some support. In addition, the Western Plains region remains fairly dry. FranceAgriMer forecast their 2019/20 soft wheat stocks at 2.41 million tonnes which would be a 6-season low. Egypt has purchased 4.9 million tonnes of wheat this season which is 7% ahead of last season’s pace.

The information conveyed by ADMIS or its affiliates to the audience is intended to be instructional and is not intended to direct marketing, hedging or pricing strategy or to guaranty or predict future events, including the pricing and pricing movements of commodities and commodity futures contracts.

December 11th, 2019|
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December 11 Afternoon Comments

By ADM Investor Services Research Team

SOYBEANS

January soybeans finished Wednesday’s session with a moderate loss after closing higher for six sessions in a row as its December rally ran out of steam. In addition, Wednesday was the first session that the soybean market was able to take out the previous session lows during that rally. Talk that the market has moved up “too far, too fast” helped to spark some selling, while there are increasing concerns about the longer-term demand from China given the expectations for a record crop from Brazil. The USDA announced a sale of 585,000 tonnes of US soybeans to China, the largest sale in more than eight months. The USDA also announced a sale of 140,000 tonnes of US soybeans to unknown destination. Ag Secretary Perdue said that China lifting tariffs on US soybean exports was a signal of progress on agricultural trade. March soybean oil is trading moderately lower on the day as it also ended a 6-session winning streak as the market was pressured by news of an 8% monthly drop in Indonesian palm oil exports. March meal extended its recent pullback as it dropped down to the lowest level since December 4th.

CORN

March corn broke out of its recent consolidation to the downside as it took out the November lows and reached the lowest level since September 12th before finishing Wednesday’s trading session with a moderate loss. Fund sellers seem to have remained active in the corn market with open interest creeping higher over the past week. In addition, carryover pressure from the wheat market helped pull the market lower early. There were 79 deliveries against the December corn contract. There was widespread rain over South African growing areas that have eased dryness concerns with their current corn crop. Ethanol production for the week ending December 6th averaged 1.072 million barrels per day. This is up 1.1% vs. last week and up 2.5% vs. last year. Total Ethanol production for the week was 7.504 million barrels. Corn used in last week’s production is estimated at 107.5 million bushels. Corn use needs to average 103.8 million bushels per week to meet this crop year’s USDA estimate. Stocks were 21.815 million barrels. This is up 5.7% vs. last week and down 4.7% vs. last year.

WHEAT

March wheat stayed on the defensive as the selling pushed the market down to the lowest level since November 22nd before it finished Wednesday’s trading session with a moderate loss. In contrast, March Kansas City held within an inside-day range before ending the day near unchanged level. There were no deliveries against the December Chicago wheat contract and one delivery against the KC December contract. The huge discount of Kansas City wheat to Chicago wheat helped to provide some support. In addition, the Western Plains region remains fairly dry. FranceAgriMer forecast their 2019/20 soft wheat stocks at 2.41 million tonnes which would be a 6-season low. Egypt has purchased 4.9 million tonnes of wheat this season which is 7% ahead of last season’s pace.

The information conveyed by ADMIS or its affiliates to the audience is intended to be instructional and is not intended to direct marketing, hedging or pricing strategy or to guaranty or predict future events, including the pricing and pricing movements of commodities and commodity futures contracts.

December 11th, 2019|
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