Grain Market Technical Overview Nov 23
November 25, 2015Grain Market Technical Overview Dec 2
December 2, 2015Commodity Market News Dec 1
Summary
This week we will be see a heavy dosage of US economic data but perhaps the most important one to watch Friday’s jobs report. The Street is looking for an 81k decline in non-farm jobs created compared to last month’s figures and for the unemployment to remain unchanged at 5.0%. Clearly the economy is not looking very strong given these expectations but we are still staring at the face of a rate hike. There is a Fed Policy meeting scheduled for December 15 – 16 with the policy statement and press conference scheduled the afternoon of the 16th.
Corn
The current Corn market has a weaker cycle than the Soybean market. While the Soybean cycle looks to remain in a sideways pattern, the Corn cycle is pointing toward a continued price decline at least through the end of the year and probably through the end of January. The next WASDE and Quarterly Grain Stocks reports are scheduled for December 9th and December 31st respectively. Those reports stand to be market movers. The current uptick that we are seeing should not extend beyond this Friday December 4th.
The US ethanol production was at an all-time high last week. Production came in at 1.008 million barrels per day, which is the first time ever for production over a million barrels a day. Corn export sales were quite large coming in at 2.036 million tons, considerably the largest sales number of the year.
Soybeans
The Soybean market started the week under heavy pressure from the results of the Argentinian run-off election amid concerns that President elect Macri’s campaign promises would cause a flood of stored Beans into the international market. Calmness eventually prevailed as the market digested the notion that it may take some time to implement his measures. He won’t be sworn in until December 10th. The Brazilian Ag industry is estimating a Soybean crop of about 98.5 million tons. The USDA estimates are very similar coming in at 100 million tons. According to current cycles, the next trend should be a rally that starts at the end of the year or even early 2016 that runs through February of next year.
Wheat
The Winter Wheat condition in the US saw an uptick of 1% improvement last week which made for the 4th consecutive week of improvements. According to a Bloomberg survey, the Winter Wheat acreage shows plantings at 39.376 million acres. That figure is a six year low. The Chinese imported 316k tons of Wheat in October (68% of which came from the US), a 53% uptick.
Crude Oil
An OPEC meeting is scheduled for December 4th. The average price of a gallon of gasoline is now continues to decline. It is down 8 ½ cents from last week. Even with the downing of a Russian fighter plane by Turkey prices have not been able to find any support as of yet.
March 2016 Corn
March Corn traded inside of what was our target zone all of last week. Conversely the 378.50 and 384.50 areas should be resistance upon first approach. The current movement looks like big players are fishing for stops. The main trend is still down but the stochastic is moving up from oversold to perhaps overbought. We continue to have a bias to the downside for the near term Corn market.
January 2016 Soybean
Our volatility based support low was stronger than we anticipated. Last week’s highs found resistance at the 879.50 mark but that was broken today. The next level on the horizon is 891.75 then 900. We believe that this contract will find great difficulty at the 900 mark. Additionally, once this current advance terminates we anticipate that Soybean can make a higher low which suggests that the contract low would be in place as of November 23rd. A higher low would be a great spot to look for a potential long position.
