Morning Grain Comments, 11/25/2015

Wednesday, November 25, 2015

The bulls have to be happy with a penny or two of gains this morning, with the grain markets weathering outside market pressure—the dollar index put in that spike over the 100-point mark for the first time in eight months, while crude subsequently tumbled $1/bbl to cut the legs out of the week’s rebound thus far. Grain volume was decent overnight but trading ranges were thin overall—the trade might be content to head into the holiday and wait for further fundamental news, now that we’ve seen what the markets can do to build on Monday’s bullish reversals (very little). We’ll continue to monitor some scattered dryness in key Brazilian crop areas, mainly a story at this point only since Brazil is trying to hit that massive 100 MMT mark...

Egypt’s GASC is seeking milling wheat again today for Dec 21-31 shipment; traders are estimating French wheat as the cheapest offered on a cost & freight basis, with two cargoes priced around $206/tonne C&F, and Russian and Romanian wheat not far behind in the $206-207/tonne C&F range.

Japan bought 29k tonnes of feed wheat and 16k tonnes of feed barley in their weekly SBS tender (for up to 120k/200k) for February arrival.

The USDA cut their 2015 U.S. farm income estimate to $55.9 billion, down from $58.3 billion estimated in August; that’s now down 38% from 2014, and 55% below the record $123.3 bln income from 2013. It also marks the largest year-over-year drop since 1983, and the lowest absolute level since 2002.


Today’s charts show price action of the spot CBOT December corn and January soybean contracts, for the day before and the day after Thanksgiving. What used to be a consistently sleepy pre-holiday session on Wednesday for CZ has
turned more volatile, with an average move of just over one penny from 1991-2008 (with a max move of three cents!), and 7.25 cents since. SF5 lost 31 cents on 11/28 last year, but was eventually supported at $10 thru mid-Jan expiry.



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