Happy new year friends!
Corn (H17) 351’0 +1’2
Soybeans (F17) 1005’0 -7’6
Chi Wheat (H17) 408’6 +4’0
KC Wheat (H17) 418’6 +3’4
Cotton (H17) 70.72 +.22
Before I get into the breakdown I want to thank everyone for following along with me in 2016. Putting the puzzle together can be difficult, I could not have attempted it without the readers who stay in contact with me. I learn as much from you as you hopefully learn from me. I look forward to a fantastic 2017, thanks again for reading.
It was a wild day of re-balancing on grains as little news other than exports and Argentinian flooding was out there to move the trade. The markets themselves were quiet until about 1:10, and then the fireworks started. Soybeans dropped about a dime from unch to down 10, then rallied a bit into the close. Wheat saw the opposite price action with a move from sub 405 to +409 observed. Cotton completely fell apart, with March +71 before the close and sub 71 on it. Dec 17 cotton made a run at 70 cents but failed again. Corn was quiet staying between 350 and 354 all day.
The forecast is little changed from the overnight run for Brazil. They look for limited rainfall over the next 2 weeks. This is normally a wet time of the year and with temperatures rising, expect to see some photos of crop damage. A high pressure Ridge looks to hold across NE Brazil with a fast moving and strong jet stream pulling across S Brazil/N Argentina. High temperatures look to range from the 90’s to the lower 100’s across N Brazil which will fuel rapid soil moisture evaporation. The guys I read are saying this is not a typical weather pattern, problems exist.
Wrapping up 2017, here are each markets front month (continuous) performance for 2017. Looking at these charts here are a few things I notice:
- Every year since 2007 we have seen front month corn get over 4.40.
- The existence of ethanol looks to provide a floor near 3.20 in corn
- Soybeans has traded in a relatively small range since 2015 compared to the history of the last decade. Be careful in beans this year, it feels like a rip is coming.
- The chart doesn’t reflect the pain felt in the wheat markets. Front month prices have been relatively quiet, but given the loss of “time” through the carry, you would have lost more than 50 cents if you had rolled all year.
- Cotton long term charts feel like they want to test that summer 2016 high next year. Markets have been resilient of late, while I remain short I have my fire suit on, ready to take some heat.
CORN: Opened at 359’4- Closed 351’0: – 8’4
SOYBEANS: Opened 2016 at 863’0, Closed at 1005’0: +140’0
CHI WHEAT: Opened 2016 at 472’0, closed at 408’6 -63’6
KC WHEAT: Opened 2016 at 468’4, closed 418’4 -50’0
COTTON: Opened 2016 at 63.28, closed at 70.72 +7.44
Lastly, I ask for everyone to keep my family in their prayers. The Payne’s of Davenport, Iowa lost the matriarch of our family early this morning. Janet Payne was 85 years old and is survived by her husband of 68 years, her four children and her many grandchildren and great grandchildren. When Norman Rockwell painted the American Grandmother, Janet Payne would have been his muse. We will miss you grandma, enjoy your wings.
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