|Cotton: Afternoon Comments (Wednesday, December 24, 2014 01:43:28)
We will be closed Friday so the next update of this section will be Monday. We wish all readers a very Merry Christmas!Very light trade and directionless price action ahead of the Christmas break for futures. Cotton futures finally poked their head above the 61 mark in futures Monday and triggered a bunch of buy stops for a triple digit gain. One would have expected the positive chart action to attract follow-through buying yesterday, and it did - but couldn't last. A wave of selling rolled through the cotton pit wiping out 100 points in just the last 15 minutes of trading. Now today, not much movement either way. But what's important is that prices on the weekly chart are flirting with important overhead resistance at 62. Should that be penetrated, there's little else on the chart to prevent a test of the next overhead resistance at 65. But I will stick my neck out and predict that it will be the top end of the range that gives way, not the bottom. And that will happen as it becomes more clear there will likely be a significant drop in cotton acreage in 2015, both here in the U.S. and globally.
|Wheat: Afternoon Comments (Wednesday, December 24, 2014 01:43:28)
We'll be closed Friday, so this section won't be updated until Monday. I hope all have a very Merry Christmas.I said last night that it was a little surprising that futures scored decent gains yesterday because there had been no further word from Russia regarding when they plan to impose export levies to slow sales, how high those levies will be and whether or not they'll apply to wheat already sold but not yet shipped. Officials said Monday that this critical info would be released ===QUOTE===within 24 hours===QUOTE=== but there's been nothing.Today's big losses were even more surprising after early strength on a warning by a Russian grain producers group that Russia might not even meet commitments to Egypt, it's biggest customer. But as the union rep quickly retracted that warning and admitted they'd received no such threat from Russian authorities, selling gained momentum and stops began to be triggered, the decline feeding on itself. The message I take from this as an analyst is that prices had already factored in a nearly ===QUOTE===worst case===QUOTE=== outcome for Russia, where exports might fall 4 million tonnes short of current forecast of 22 million.But most analysts agree such a shortfall could easily be met by European sales where stocks are plentiful, albeit some quality problems. I now suspect that when we return Monday we'll find weather through the extended holiday a more ===QUOTE===deciding factor===QUOTE=== on post-Christmas price action. There is some new bitter cold predicted for the Plains, but also a good chance it will be preceded by some fresh snow cover. Plus, there's good precip forecast for the vulnerable Black Sea region which reduces worries about winterkill over there ... at least for the next 10 days or so.
|Soybeans: Afternoon Comments (Wednesday, December 24, 2014 01:43:28)
The soy complex ended mixed. Optimism about demand strength apparently continued supporting nearby soybean meal and bean prices Tuesday. However, the prospect of another record Brazilian crop and the rising U.S. dollar appeared to undercut the soy complex later in the day. Ongoing palm oil gains, as well as rebounding energy prices, boosted soyoil futures somewhat. Again, trading was light in pre-holiday action, with the nearby contracts benefiting from major technical support at slightly lower levels. January soybean futures closed up 0.25 cent at $10.385/bushel Tuesday, while January soyoil climbed 0.18 to 32.22 cents/pound, and January meal moved up $2.9 to $371.3/ton.
|Corn: Afternoon Comments (Wednesday, December 24, 2014 01:43:28)
This office will be closed Friday so the next update of this section will be Monday. We wish all subscribers a very Merry Christmas!The long string of small but steady new highs for this post-harvest rally came to an end today on pre-holiday profit taking by the longs; not much else. Much of the selling may have been spillover from sharp losses in wheat. For that reason, it's unwise to make too much of the negative technical action on the corn charts, although the break did penetrate the very steep uptrend line of recent weeks. That alone could lead to some follow-through selling on Friday, but with low volume and no real news to suddenly turn the outlook bearish, today's negative price action is suspect. No change in advice.Evidence of firm global feedgrain demand (including sorghum, we might add) remains a positive driving force for prices, as is the return of fund interest. Funds bouth a reported 3,000 contracts today. Another supporting factor is ongoing uncertainty about how far Russia will go in curbing grain exports to curb domestic inflation.We expect prices to continue steady to higher into early 2015 as the market anticipates slightly lower acreage and production estimates in January. However, gains are likely to be held in check by increased farmer selling and cash movement on rallies after January 1.
|Hogs: Afternoon Comments (Wednesday, December 24, 2014 01:43:28)
Pork strength supported CME hogs. Cash hog prices have clearly taken a seasonal tumble lately and continued sliding this morning. However, the ham market has not fallen as sharply as expected in the past few days, with pork cutouts proving surprisingly firm since late last week. Having the nearby contracts lead today’s advance may signal more of the same. February hog futures leapt 1.40 cents to 81.65 cents/pound at their Tuesday close, while June hogs rallied 0.57 cents to 89.65.
|Sorghum: Afternoon Comments (Wednesday, December 24, 2014 01:43:28)
The office is closed Friday so the next update of this section will not be until Monday. We wish all subscribers a very Merry Christmas.Sorghum’s higher price trend remains intact on excellent demand, particularly EXPORT demand. USDA's current forecast calls for sorghum exports to rise just 9% in 2014/15, to 405 million bu. from 370 million last year. They started out slow, a bit below last year during September, but have since been very robust, consistently exceeding year ago levels by three- to four-fold! Just last week, for example, weekly sales were 250,000 metric tonnes, virtually ten times the amount sold the same week a year ago. China is an especially consistent sorghum buyer this year.USDA released the long-range forecasts to 2024 last Thursday. In the past, the ten-year outlook is complete at this time internally at USDA, but not released until February. But this year USDA decided to go ahead and release the preliminary forecast now. USDA’s assumption for 2015 sorghum acreage is 7.5 million, up from 7.2 million in 2014. However, acreage drifts lower over the ten-year forecast to 7.0 million in 2024/25. The yield is flat at 65 bushels. Ending stocks hold steady next year at 37 million bushels with the season average price at $3.30/b, down from $3.45 this year.