Corn – March at 430 holds this market again, Dec crop report a week away and may be supportive
↑ The 430 level acted as solid support again posting a low yesterday of 429 ¾ and recovering slightly
↑ Few are likely to expect much if any changes on the December crop report a week from today but it
could still be slightly supportive as it will remind all traders just how far underpriced grains are
↔If the USDA makes no changes next week it will still imply fair value at 440
↔Funds were sellers of 17K corn on yesterday’s COT report, a solid amount of selling but not likely a
major influence as they don’t hold a major position right now, long 97K or 23% of record
Beans – Recovery from tariff fear selling, next week’s report serves as a larger reminder for beans
↑ With no new tariff headlines yesterday we are seeing some recovery from tariff fear selling
↓ In the past 2 weeks we have seen resistance come in quickly as Jan approaches 1000
↑ Next week’s Dec crop report will serve as an even larger reminder how oversold beans are compared
to fair value, as of this morning corn was priced 1.31% under fair value but beans are still 4.01% under
↔ARG saw a slightly improved rainfall forecast on morning maps which were drier yesterday
↓ Brazilian analysts are raising their BRA crop estimates with Celeres yesterday raising to 170.8 MMT
Which is well over last year’s crop of 154.5 MMT
Wheat – Again bouncing off of contract lows but not threatening to take out the downtrend
↑ A slight easing in the US dollar overnight may be allowing for a technical bounce away from contract
lows but to take out the downtrend the March CHI would have to move above 564
↑ Wheat is priced 5.35% under fair value so next week’s USDA report could have a supportive influence
Cattle – BB higher, showlist -13K, Tyson to shut down a KS packing plant
↔Yesterday’s PM BB was choice +2.49 select +2.70 packer BE at 187.33, packer cushion -$2.52
↔Yesterday’s cattle notes mentioned that the packer loss level is not infinite and sure enough we saw
a headline that Tyson will shut down a KS packing plant, a sign of exactly what packer profit levels would
suggest that at negative gross profits it saves more money simply to shut down entirely
↔BB is higher but not keeping pace with cash just yet, showlist is -13K
↓ A case could be made that funds were sellers yesterday, there were enough volume spikes to suggest
it and the open interest yesterday was -3K which also hints at fund selling as well
↓ It’s likely some are also trading the seasonal trend for the pullback expected right now