Chicago Agriculture Commodities Finished Higher on the Week

Chicago Agriculture Commodities Finished Higher on the Week


Chicago Board of Trade (CBOT) agriculture commodities finished higher on the week ended 9 February, mostly on volatile South American weather and increase export demand for US crop.

The most active Corn contract for March delivery rose 0.5c weekly, or 0.14%, to 3.62 bu,

March Wheat delivery went up 2.25c, or 0.5%, to 4.49 bu,

March Soybean added 4.25c, or 0.43%, to 9.83 bu on the week.

Corn futures finished the week off the highs, but fractionally higher. South American weather and surprising increase in the US export forecast were the Key drivers for the CBOT trade.

Fundamentally, Ethanol production margins remains positive with average margins across the Corn belt estimated at an average of 0.13/gal Vs just 0.03/gal a year ago. Feed demand should also remain strong through 1-H of Y 2018 amid record Hog herds and larger Cattle on feed supplies.

Funds last week covered nearly 48,000 contracts and cut their net short position by more than 60%. The Big Q now is weather the dry weekend forecast for Argentina materialize, and if funds decide to cover the remainder of their position.

Wheat futures finished the week higher, despite a more Bearish February world agricultural supply and demand estimates(WASDE) report.

The US Department of Agriculture(USDA) lowered cut their estimate for US Wheat exports, and stocks were again back above 1-B bu.

Funds bought over 13,000 contracts in Chicago, and 17,000 contracts in Kansas City which put them net long in Kansas City for the 1st time since mid October. Funds sold just over 800 contracts in Minneapolis, where funds have been net short for 2 weeks running, after being long since last May.

Soybean markets ended the week higher as ongoing concerns for Argentine crops offered support.

The February WASDE report should have been Bearish for the markets, as the USDA made a record large February decrease to the Soybean export projection, and conversely a record large increase to the stocks forecast.

Rains have fallen across the northern parts of Argentina, but the heaviest rains have stayed north of the Soybean belt, while limited rains are scheduled for the lower 0.75 in of the Soybean crop areas over the next 10 days.

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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