Corn – March returns to fair value levels, Friday’s COT report may have eased selling from others
↔March has returned to the 440 fair value level, now the question is if exports can remain strong to suggest moving that fair value level slightly higher due to USDA raising exports
↔If the USDA raises exports it is not expected until the Jan crop report, the Dec report is typically calm
↔Friday’s COT report showing funds as buyers of 88K may have caused other smaller speculators to slow their selling as few traders aim to trade the opposite of funds
↔ It’s also worth questioning if ethanol should be raised by the USDA, again not expected until January
Beans – Light overnight cautious trade again, yesterday saw 8 AM sales just not to China
↓ Once again overnight added light pressure which is likely still on fear that China will slow/stop buying
↑ We did see an 8 AM sale yesterday of beans, meal and bean oil but overnight may still be concerned as it didn’t go to China and the key cautious trade has been fears of a China specific slowdown
↔While March corn has reached back to fair value, Jan beans are still far under 1035 fair value
↓ SA weather still looks strong, active rains for BRA and ARG now sees moderate to active rains as well
↔The key yield determining timeframe for BRA beans is Jan/Feb
Wheat – HRW GTE 49%, the best Fall GTE in 5 years, trade expected 46%
↓ HRW GTE is the best in 5 years at this week coming in at 49%, 5 year ave is 45%
↑ The US dollar is slowly coming off the recent strong spike high, this may ease concerns on exports
↔Upside might be limited as recent exports have been just moderate, nothing strong enough to suggest a new round of sustained support
Cattle – BB higher (3rd Monday in a row), packer profits still slightly negative, optimism continues
↔Yesterday’s PM BB was choice +3.94 select -0.69 packer BE at 185.02, packer cushion -$0.15
↔BB was higher for the 3rd Monday in a row, it is worth noting that going back 2 Mondays we saw BB higher and the other 4 days lower, last Monday the same with Monday higher, rest of the week lower
↓ Packer gross profits at -0.15 is still tough to assume even a steady cash trade much less a higher one
↑ We know that speculators have been extremely optimistic for weeks now despite poor news so there is little surprise on seeing support before it is fundamentally deserved
↑ Speculators also likely pre buying Friday’s COF which is expected to have an increase in Placements