Good afternoon friends
Corn (H17) 347’2 +4’6
Soybeans (F17) 1027’4 -2’2
Chi Wheat (H17) 404’2 +8’2
KC Wheat (H17) 408’6 +5’6
Cotton (H17) 71.04 +.14
GREEN day at the CBOT for corn and wheat after a tough week of trading for the feed grain markets. Beans closed just around unchanged. If the pattern from early September would hold then the lows are in the rear view from delivery. I think we have a decent shot at a bounce in corn and wheat back up to levels we saw before the break. I think 360 corn probably holds some resistance in March for now, the market knows the producer is going to get some corn shaken out of storage by January as the banker will be calling. If you renowned the delivery break I would recommend selling some Jan (Dec 23) expiration calls over the position. If you own more physical corn, all the better.
The CFTC report will be released after I write this, but I assume we will be seeing record short wheat spec positions and darn near record short corn. I assume the cotton position has revealed its self somewhat. Speaking of cotton, the weather is going to get cold but stay dry in Texas, that should keep a lid on prices in the short term. If you rolled shorts from March into Dec 17. The harvest pace has me thinking a roll back around 2.00 is probably a good play to get back into the front month, the cotton seasonal stays strong through December. With funds this long I am not against letting it go at these levels. But I remain set up for a sale in the gap near,
Wheat has the most potential for a run, but the cool temps that are coming down the calendar in Kansas (maybe some snow too) that probably help keep the condition rating levels high. Regardless, it remains dry out west. I look for March KC wheat to get into the teens before falling apart. As a wheat bull (July) at these prices, Im getting impatient. I just keep reminding myself we will kill this thing a few times before spring.
No new export biz was announced today in soybeans. I heard a rumor this today that at a recent international grains council meeting, the Chinese delegation got up and walked out as the US was going to present. I expect to see Chinese offers moved to Brazil in coming weeks. Bean export pace jumped this week, going counter to that argument. MRCI has a seasonal buy in soy meal staring today. Brazilian conditions remain solid, barring a dry spot or two in Southern Brazil and Argentina. I think beans are set to contract vs corn as we come into the end of the year and the funds cover some of these short/longs. Don’t look for it to happen too soon though.
Thanks for joining me again, have a fantastic weekend.
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