Closing Grain & Soybean Comments

Closing Grain & Soybean Comments
Kevin Riesberg Friday, December 26, 2014
SOY-Complex: Beans rallied today on light volume with January option expiration the main driver though some
support came from soyoil. Chart below notes that Malaysian palm oil has rallied the last 8 days due to monsoonal
type rains/flooding causing some damage to the plantations. Meanwhile weather in S. America remains general
favorable for growing conditions in Argentina/Brazil. Farmer selling was lacking today given the holiday mode.
8/13/2014 - 1/5/2015 (KUL)
Price
MYR
T
Malaysian palm oil futures ringgit/ton
Daily /FCPOc1, 1BOc1
Price
Line, /FCPOc1, Trade Price(Last)
USc
12/26/2014, 2,250, +33, (+1.49%)
Lbs Line, 1BOc1, Trade Price(Last)
12/26/2014, 32.46, +0.53, (+1.66%)
2,250
2,240
34
2,200
33.6
2,160
33.2
2,120
32.8
2,080
32.46
32.4
2,040
32
2,000
US soyoil cents/lb
31.6
1,960
Auto
Auto
18
25
August 2014
02
08
15
22
29
September 2014
07
13
20
27
October 2014
03
10
17
24
November 2014
01
08
15
22
December 2014
29
05
Also traders are reluctant to establish fresh new shorts today in front of Monday's weekly export sales report.
Trade estimates for Monday's report is 450-650k tons for beans, 50-200k tons for soymeal and 5-30k tons of
soyoil. Deliveries next week against Jan beans and meal are expected to be light. Jan/Mar bean spread hovered
in 6 1/4 to 6 1/2 range today. Resistance for March beans remains toward $10.60-10.75. CIF bean basis was soft
with lack of traders. There is chatter that China has 1.0-1.5 mmt of US soybeans to book yet for Feb slot.
CORN: Corn follow beans and meal with little farmer selling to seen after the holiday while Monday's weekly
export sales report is expected to be solid at 500k-800k tons. Support came from Russia putting on a 35 euro/ton
export duty starting on Feb 1st. This will effectively stop all grain/wheat exports until next summer. China's govt
also is to auction off 5 mmt of govt reserve corn the 2nd week of January. If firms want to secure some of the
coveted import permits, they must partake in this auction with the permits doled out according the amount of govt
reserve corn a firm buys. Otherwise is was a very quiet day. US corn basis was steady to mixed with some
plants sharply higher due to holiday week. Elevators report increased farmer selling though from $4.15-4.25 in
March. Path of least resistance is higher next week or until we find farmer selling.
WHEAT: Mixed trade in the wheat market as Russia's announced export tariff of 35 euro/ton was less than the 50
euro/ton that was rumored about on Wednesday. Probably more negative was the tariff doesn't start until after
Feb 1st and this will allow most of the Egyptian sales to get shipped. Still about 4 mmt of wheat export demand
will have to be shifted from Russia to other parts of the world, namely Western Europe, Canada and Australia. At
this point US wheat is still too high priced to participate except for normal business to Japan, Taiwan and Latin
America. Weekly export sales are to be 250-450k tons on Monday.
The weather forecast calls for below normal temps for the southern Plains of -5F to -15F next week but trade is
watching if the HRW gets enough snow cover first on Sunday/Monday (some forecasters are calling for 2-6 inches
of snow in CO/KS area). Technically the wheat market is struggling with Chicago March needing to hold the $6.00
area otherwise the door toward $5.60 opens up. Market direction Sunday night will be driven by updated weather
forecasts and outside markets.
Have a good weekend!
RJO’Brien
Service is our trade
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