Corn: CZ closed down 3 ¾ cents at $3.67 ½. For the week CZ lost 9 ¼ cents. The average analyst guess for Monday is 14.528 billion bushels. The average analyst’s yield guess is 175 bu/acre. World Supply 2014/15 ending stocks average analyst’s guess is 190.77 MMT. Argentina announced 8MMT of new corn export quotas which will hit market sometime during March 2015. The weekend harvest weather looks dry and cold here in the US. Planting is going forth as well as expected with only 15% of Argentina’s acres delayed due to lingering drought. Monday we will get a worldwide supply update. The trade is looking for an additional 75 million bushels of US corn; European corn production is expected to be higher and their corn imports lower. Last Friday’s 3 month high settlement at $3.76 ¾ continues to look like a gift to producers. Resistance above is at Last Thursday’s 3-month high at $3.81 while first support lies at yesterday ‘s (Thursday) 2 week low at $3.59. Traders will be eying those of those prices during the first knee jerk reaction to Monday’s USDA information dump. The funds remain long an estimate 187K contracts. Hedgers: No change in recommendations. Wheat: WZ settled down 5 ¾ cents at $5.14 ½ which is the lowest settlement in 3 weeks. For the week, WZ lost 18 cents. Worldwide production for wheat will be updated. Most analysts look for a drop in Australian production. The average expected worldwide carry for 2013/14 is 185.53 MMT vs 185.58 from October. 2014 ending stocks are expected to be 192.15 MMT. The US dollar posted a fresh 4 year high at 88.19 today, which can only weigh on our competitiveness. Technically, Last week’s 2 month high and 2 month high settlement look like they were gifts to any farmers who had held unpriced bushels through the 5-year low down at $4.66. That 80 cent rally represented a 16% bounce in value. Hopefully as a producer you took advantage of that bounce to either sell grain, or roll up your put protection. Technically, there is support on the charts for December down at $5.11, $5.00 and then $4.88. Above, last Thursday’s 2-month high at $5.45 ½, if breached, could set off more short covering. The managed funds remain short approximately 45K contracts. Hedgers: No change in recommendations. Soybeans: January Soybeans settled up 8 ¾ cents at $10.36 ¾. For the week, SF gained 8-3/4 cents. Once again beans traded lock step with the Dec Meal. The new sport for professional traders seems to be “pin-the-tail on the meal”. So far, that seems to be a dangerous game for your wallet, unless your timing is perfect. Most in the trade believe the logistic issues creating meal demand will end sometime in the next 2 to 8 weeks. That type of vague time window seems almost meaningless. In the end, you might as well say, “It will be over when it’s over”. Monday the average analyst guess for crop is 3.958 billion bushels with an average yield guess of 47.5 bu/acre. 2014/15 ending world stocks are expected to be between 89.50 and 92.55 MMT. Any knee jerk initial move will challenge either 10.59 ¼ (Last Thursday’s 3-month high) and $9.95 ¼(Wednesday’s) 2 week low. The managed funds are long a relatively paltry 15K contracts of beans. Hedgers: No change in recommendations. Monday at 11AM we get a fresh USDA information dump. If you are following along with the marketing plan you should be in pretty good shape, regardless of what surprises might be in that report. We had a wild week in the outside markets. The Dow marched to new all-time highs to settle above 17,500 for the first time in history. The US dollar moved to a fresh 4 year high, while on the flip side, gold spiked to a new 4 year low. Crude oil remained below $80/bbl. Unemployment fell to 5.8%. The Republican’s rode a wave of voter discontent and regained the Senate to complement its majority in the House. Let’s hope next week, if the markets have more surprises for us, they are surprises to the upside. Remember, last month we were sitting at 5-year lows across the board in the grains. Fortunately, October gave us a 63 cent bounce in CZ, (+20%); 77 cents in wheat (16%); and + $1.47 (16%) in SF. Certainly the funds that are long 187K contracts of corn are looking for a continued rally. Monday those bulls get their report card. Will we see follow through to fresh highs? Or was the October price bounce nothing more than a side effect of the “great rail car shortage of 2014”? Have a great and safe weekend. CER
