Afternoon Corn and Soybeans: Higher weekly closes for corn and the soy complex
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><div style=\"line-height: 1;\"><span style=\"font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">Afternoon Corn and Soybeans: <br id=\"isPasted\"> <br>Futures took a breather after an exciting Thursday. Beans (5-8 cents lower) and Meal ($3-4 lower) gave back some of that day’s gains, while corn and oil closed out Friday with fractional gains. For the week, corn gained 7 ¾ cents, beans added 5 ½ cents, meal was $6 higher, and oil held steady. Corn futures closed at a fresh six month high. Funds are viewed net long corn, net short beans and meal, and near flat on soy oil, with a CFTC update pending Monday night. Cash corn trade was weaker as the market digests another round of farmer sales, while cash beans were steady/firm.<br> <br>Holiday trade continues, though there was a lot of potential inputs thanks to Jan serial option expiration and two (delayed) weekly gov’t reports. First on the agenda was weekly export sales, and they arrived in good stead for corn, meal, and oil, while soybean sales were a little disappointing. Weekly corn sales of 1,711,300 metric tons (mt) were 46% greater than the prior week and toward the high end of trade expectations. Soybean sales meanwhile were a marketing year low of 978,400 mt and toward the very low end of expectations. Meal sales were 30% above the four week average at 389,600 mt, while oil sales were a respectable 40,400 metric tons. Exports of all four commodities are running ahead of last year’s pace; oil sold/shipped by a lot (up 16x!), bean sales by a little (+10%).<br> <br>The weekly EIA was up next, and it arrived in-line with our forecast for ethanol. Ethanol production upticked +0.4% to a 1.107 mil bbl/day rate, which would would utilize 5.80 billion bushels of corn if averaged over a marketing year. Blender demand was quite strong, rising +2% wk/wk. Ethanol exports were better than expected, holding near steady from the prior week at a 166k bbl/day vs. 132k prior year. Ethanol stocks built the expected +1.9% to 23.074 million barrels (969 million gallons). Ethanol futures lost ground to corn for a second session; we think an average Midwest plant is losing a little money today, net of all costs.<br> <br>Elsewhere, other end-user markets were mostly firm today. The big macro was mixed today; for the week, the dollar, oil, and stocks, were all slightly firmer. On the weather front, the South American forecast maintains net drying for Argentina into the new year. No serious crop issues are expected at this point and there are some limited rains in the forecast in January, but moisture deficits are expected to expand net/net which will require some monitoring. Meanwhile, rainfall in Brazil is forecast to remain plentiful for most growing areas. Monday will be “position day” ahead of Jan First Notice Day on Dec 31<sup>st</sup> for the soy complex. There was not a lot of additional chatter regarding the fire at Bunge’s Cairo, IL, facility. A conveyor belt and three grain bins were said to be damaged?<br> <br>In the options, serial January expired without a lot of fanfare. $9.80 pin for Jan Beans? The oilshare bounced back after an ugly Thursday, while the soy crush was not much changed after rallying to a one month high. Technically, March Corn is making a good trade, closing a second day above important resistance around $4.50. The move has left CH slightly overbought, suggesting potential resistance around $4.60; support moves up to $4.40-4.45. March Beans stumbled on resistance at $10; recent lows at $9.50 stand as support. March Meal built off the key reversal higher on the weekly chart, though $310-320 looks like a logical resistance area. Support there moves up to $300. Oil is trying to hold support around the 40 c/lb area in March; 42 cents represents initial resistance. <br> <br>KJ </span></div></div>