Chicago Agriculture Commodities Finished Mixed

Chicago Agriculture Commodities Finished Mixed on the Week

$CORN, $WEAT, $SOYB

Chicago agriculture commodities finished mixed on the week ended 1 December with Corn futures rising higher while Wheat futures trading lower.

CBOT Corn rallied 3 cents on late week fund short covering, which is being driven by less than ideal climate forecasts for South America. As expected, the arrival of La Nina is working to keep rainfall away from Argentina and Southern Brazil, and in the case of Argentina some 30% of the crop there will begin pollinating in the last half of December.

The US Gulf Corn is competitive with South American origin and the US export sales pace will increase.

None of this will really change the US balance sheet, but with funds sitting on a sizable short, Corn could rally 0.25 to 0.40 bu on their liquidation.

Winter Wheat futures ended lower, but other contracts crawled to minor gains.

There’s not a lot of fresh Wheat news available, but a managed fund net short position this week worth 123,000 contracts is Bullish and Southern Hemisphere production has shown limited signs of improvement.

Argentina yield data indicates the US Department of Agriculture’s (USDA) forecast is overstated. Too much rain will fall across South Australia into mid-December. And drought will continue to expand across the US hard red Wheat belt.

However, a needed demand driver remains absent and the pace of US export sales has been disappointing. There is hope for better interest in Q-1 of Y  2018, but this looks to be short lived barring adverse weather in the Black Sea.

Soybean traded on both sides of unchanged through the week, with much of the action in the CBOT Soy markets realized in Soy complex spreads ahead of the US Environmental Protection Agency(EPA) bio-fuel announcements, and building concerns for South American weather.

The EPA’ s bio-fuel targets did not offer any surprises, and was little changed from the initial proposals that were released back in July.

Rallies have been slowed by rising South American and US Soybean crush and meal production rates, while breaks under 300/tonne have repeatedly found long term end user support.

Argentina has planted 43% of its soybean crop versus the 5-year average of 53% and the market is quickly building interest in weather.

In a La Nina year, the odds are high that dryness with building heat will be the theme for the CBOT through December.

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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