** CBOT Midday Market Comment;
** CBOT prices are mixed at midday with the grains firmer while the soy complex is weaker. The soy complex is still suffering from fund long liquidation in soymeal while funds enter a larger net short position on soybeans and soyoil. It’s been a largely technical week with traders squaring positions ahead of the coming Christmas Holiday. ARC looks for a mixed close with the prevailing trends persisting going home. Normally, like Thanksgiving, there tends to be some sort of bounce into the long holiday weekend with the shorts always more nervous about their positioning.
** CBOT brokers estimate that funds have bought; 4,100 contracts of corn and 1,900 contracts of wheat, while selling 3,800 contracts of soybeans. In soy products, funds have sold 3,100 contracts of soyoil and 1,200 contracts of meal. Fund traders have come out of long soybean vs short grain spreads, and are now entering a net short soybeans position.
** FAS reported that for the week ending Dec 14th that the US sold 29.3 Mil Bu of wheat, 61.3 Mil Bu of corn, and 64.0 Mil Bu of soybeans. US soy product sales were 184,100 tons of meal and 24,200 tons of soyoil. The sales totals were all above trade expectations and considered price supportive.
** For their respective crop years to date, the US has sold 693 Mil Bu of wheat (down 49 Mil Bu or 6.6%), 997 Mil Bu of corn (down 355 Mil Bu or 26%), and 1,453 Mil Bu of US soybeans (down 270 Mil Bu or 15.6%). The sales pace of all three major US grains are below levels to reach USDA forecasts.
** US sorghum sales are soaring with another 17.2 Mil Bu sold last week. For the crop year to date, the US has sold 158.4 Mil Bu of sorghum, which accounts for 61% of the projected annual exports. China remains on a purchase pace that they could easily run the US short of sorghum. USDA has already sharply curtailed US sorghum feed and industrial use, making any future monthly reductions difficult. US corn will be left to find larger tonnages of US feed and industrial demand based on the void that stronger sorghum prices are now leaving.
** US elevators/banks tell ARC that US farmers have been larger sellers of cash corn/soybeans as their need for cash increases, and bankers force sales before the New Year. This could account for a portion of the open interest increase in CBOT corn futures in the past 2 weeks. A give up mentality prevails in the country as farmers give up on the prospect of a CBOT rally.
** Midday GFS Weather Forecast Discussion: The midday GFS is slightly wetter than the overnight run for SC Brazil and W and N Argentina. The heavy rains in Argentina have shifted west of their crop belt with just a few lite showers now occurring in Cordoba, Santa Fe and Buenos Aries. The system is expected to invigorate again this afternoon with better showers across the north. ARC estimates rainfall with this system in a range of .15-1.00” with localized heavier amounts. Dry weather follows from the weekend into much of next week with the next best chance of rain occurring in the closing days of December.
There will be periods of heat next week with highs in the 90’s to lower 100’s that could stress pollinating corn. Brazilian weather looks ok with a drying trend across the north and better rains chances for RGDS.
** AgResource Market Comment: It’s all about the technicals with soybeans lower and the grains firmer. Fund managers want to see if March corn can close above its 20 day moving average at $3.5125 and if better rains can fall across the parched areas of Argentina? The holidays and the end of the year loom with many traders loath to take on new positions. The grains should bounce
