Morning Grain Comments, 01/11/2016

Monday, January 11, 2016


The commodities are under pressure once again this morning, led by sharp losses in China’s stock market that have reinvigorated concerns about the health of the global economy.

Letters of credit have finally been issued for three French wheat shipments bound for Egypt.

Local analysts are raising the possibility of a torrid late-season corn planting pace pushing 2015/16 Argentine corn acreage to nearly equal last year’s area; the last estimate from the Buenos Aires Exchange has plantings at 2.85 million hectares, down from 3.4 mln ha last year, but many expecting acreage to close in on that 3.4 mln ha (8.4 mln ac) mark by the time all is said and done.

Friday afternoon’s Disaggregated CFTC Report showed managed money funds dropping over 28k net contracts on the week ending last Tuesday (1/5), once again well beyond the trade’s expectation (a –15k net), and resulting in a
new net record managed money short at –168,750 contracts. The rest of the complex exceeded daily estimates as well with beans down 13.3.k net, meal – 7.8k, oil –13k, Chi wheat –14.5k, and KC wheat 3.2k net.

 

 

Today’s charts show price action on the big January USDA report dates, since 1990, for the March corn and soybean
contracts; it also shows the corresponding upper and lower daily price limits on those dates, along with limits for tomorrow’s report. The trade had been used to that Jan report being a limit up or down affair, but that hasn’t been the case as of late due partly to expanded limits, but mostly to big crops leaving the S&D well-supplied regardless of changes.

 

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