Good morning friends!
Corn 345’6 (-2’4)
Soybeans 967’0 (+3’4)
Chi Wheat 394’4 (-1’0)
KC Wheat 401’6 (-1’2)
Cotton 69.34 (-.34)
It has been a slow overnight in regards to news a price, corn giving back some of its gains will have bears calling for a top after seeing 35 cents and almost 8% put on in price over the last month. Bulls will point to a low price point and a bullish seasonal picture as evidence that this inst a correction, rather a trend change. 3.50 is a key level and with a highly anticipated WASDE being released in the next week, I think we see the breaks pumped in the short term on this move higher.
Brazilian corn planting advances to 25% completes 34% last year. Argentina estimates have corn planting at 22% complete vs 15% last week and 13% last year. The exchange in Buenos Aires sees Argentine corn planted area up 25% from last year, which is bearish for the longer term but very telling about supplies in the short run. .
Below is a spreadsheet of world prices at different points over the last month. As you can see, Wheat prices remain in the dumpster as Russia offers remain heavily discounted to US FOB offers. This is going to be a problem for CBOT prices until we get a story to move the shorts out. I also want to point out soybean prices that have come down over recent weeks against corn prices that have rallied across the globe. I think corn has solid footing in these markets right now as we are the cheapest and most dependable supplier on the street. I look for the US markets to close the gap over Brazil in coming months, which should be bullish the board.
Lastly, cotton is making another push toward 70 cents as a hurricane bears down on the US coast. We’ve seen soft markets across the board perform very well over recent months, cotton included but I feel the time is neigh for the break. Maybe its WASDE that does it in a few weeks, maybe it will take more time and confirmation of the crop. There are some bullish waves coming from India as planted acres are down 12% this year, but the export demand just isn’t there yet. At this point I feel the good conditions in Texas are being discounted and prices are 5-10 cents too high into harvest. I recommend standing orders on Dec 17 cotton at 73 cents to establish hedges. Use March or July options if you are adverse to futures.
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