Chicago Agriculture Commodities Finished Higher on the Week

Chicago Agriculture Commodities Finished Higher on the Week

$CORN, $WEAT, $SOYB

Chicago Board of Trade (CBOT) agriculture commodities finished higher on the week ended 26 January with Wheat futures rising more than 4% on technical buying and weakened USD.

The most active Corn contract for March delivery added 4c weekly, or 1.13%, to 3.565 bu.

March Wheat delivery went up 18.25c, or 4.32%, to 4.41 bu.

March Soybean rose 8.25c, or 0.84%, to 9.855 bu.

March Corn rallied to new 7-week highs as meaningful rainfall has failed to appear in Central Argentina, and as weakness in the USD has maintained Gulf Corn’ s position as the world’ s cheapest feed grain.

Amid concern over Argentine production, Gulf Corn is the world’ s cheapest feed grain well into early Summer, and weekly export sales will remain elevated in the weeks and months ahead.

Wheat futures rallied sharply amid additional short covering, new multi-year lows in USD, and as it is difficult to ignore the recent expansion in severe drought conditions across the US Plains.

Fundamentally, US and world markets will remain more than adequately supplied, but analysts suggest a modest cut to world stocks, and potentially sizable cut in the US.

Unlike Corn, which is benefiting from strong bio-fuel production, Wheat still lacks a demand driver. Assuming normal weather in the Black Sea the US’ s share of world trade will remain abysmal, but without better Plains moisture by 1 March a test of 4.75 bu, March CME, is possible.

Soybean traded higher through the week and were again lead by the meal market on concerns for the Argentine crops. Both Soybean and Soymeal traded up to Key resistance marks, and eased at the end of the week on profit taking, though both markets were still higher on the week at Friday’ s close.

The Argentine weather forecast offers little relief for the driest parts of the country’ s Soybean crop. Limited rains and warming temps are offered through the 1st week of February, while longer term climate models show similar trends continuing to the end of the month. Funds are still holding onto a record large net Short Soybean position for January, of just over 80,000 contracts.

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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