WASDE estimates are our and they show very minimal changes to corn, wheat and soybeans. The USDA usually does not change production numbers in December. They almost always wait until January. However, they will change demand and while I think soybeans and wheat stays the same, I can see the December WASDE show less corn export and ethanol demand. Below is a video of our analysis and the supply and demand table. I think corn exports could be 50mm lower and ethanol 25mm lower. Ending stocks could be closer to 1.985 billion. That is not a big miss compared to the analysts but it could be a five cent move in the futures.
We still like Rough Rice. I know it is not for everyone but Andy Daniels still likes it and so do I. We hit resistance at $12.56 on Monday and I the market failed to break through. A close above $12.55 could lead to a bullish breakout higher. Trade small and don’t get too caught up in the day-to-day moves. This is a long term trade and we think the USDA in January will lower production, increase domestic use, and therefor the market will have to price ration exports.
The rally in energy prices and the coming production deficit has lead to sugar breaking out above 1300. Strong energy prices will increase Brazilian ethanol demand and keep sugar demand supported. Sugar is used for ethanol in Brazil. A stabilization of the Brazilian Real and OPEC continuing to cut production could send sugar the next leg higher. .Minor resistance comes in at 1320 and then major resistance at 1380. We are still bullish sugar.
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