Good morning friends
Corn (H17) 360’2 -1’6
Soybeans (F17) 1022’2 -1’6
Chi Wheat (H17) 414’6 -3’2
KC Wheat (H17) 417’0 -3’0
Cotton (H17) 71.47 unch
Currency markets are falling fast against the USD, this also includes crude oil and the precious metals markets. Silver is off 6% since the close yesterday, almost 8% from its highs yesterday. The DX is a crowded trade to the long side, but its hard to see what could change the trajectory of the trade at this point.
The good news is the CBOT markets are coming away from the fed event yesterday somewhat unscathed. Beans, wheat and corn are down a couple of pennies in the overnight but have held support levels for now. Jan beans sits right above its critical support level near 1021. Cotton markets have not seen follow thru selling yet, but I would be nervous if long. As we approach the end of the quarter, the probabilities are higher for a fund adjustment. If they choose to re balance cotton, I think we move south in price rather quickly. Support levels have held to this point. Jan options expire on Friday, get rolled into March if possible.
The rising US dollar is going to get a lot of headline play from the talking heads this week. The DX has pushed to new highs with the Euro pushes the March 2015 lows (Greece). At this point, it feels like parity between the USD and the Euro is certain. The Chinese yuan has fallen to a new multiyear low at $6.94:1, which should support soybean prices as the Chinese like to buy beans to as a hedge.
US export sales were bullish across the board for corn, beans and wheat when it comes to new exports, corn was lagging when it came to shipments. Cotton exports were decent but lower than last week. There is little grain data that will move the trade in the short run, we will begin to hear new crop acreage guesses over coming weeks but it will be weather in the short term that pushes price. The South American weather forecast is largely unchanged overnight. Hot/dry weather will persist into the weekend with showers breaking out across S Argentina on Sunday and pushing north next week. Rain totals are seen in a range of .25-1.25”, with another storm behind it. If by Monday the weather disappoints, corn and beans could catch a bid.
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