Today’s Prices
Grain markets finished higher today, partially bouncing back from oversold conditions but also some short covering ahead of Friday’s USDA (S&D) report.
Grain Market News
South American Precipitation Forecast
We see good perception for most of Brazil in week 1.
Argentina looks to be dryer than desired in the first week except for the far northeast area.
In week 2, Brazil still looks to be in good shape except for far southern Brazil.
Argentina remains in a dryer than desired trend but maybe some rains in the far west.
South America
This shows precipitation versus normal from December 1-Deemebr 20th.
As you can see much of Brazil looks to be in good shape except for far southern Brazil.
Argentina looks to be much dryer than desired which is an ongoing problem.
Observed Surface High Temps
Yesterday’s high temperatures show 100s almost the entire Argentina growing region.
Temperatures today are going to be equally hot, not just a little warmer.
Some warmer temperatures have inched their way into Brazil, Paraguay, and Uruguay.
Grain Market News
Weekly Ethanol Production
Weekly production up to 1.077 million barrels per day.
That is the largest number we have seen since mid-December last year.
Its well ahead of the 1.02 million barrels per day that’s needed.
Year to date is down 2.9% from last year, that’s below the USDA target of -1.
Weekly Stocks of Fuel Ethanol
This shows an increase for the third week in a row to 23.255 million barrels.
This is near record high for this time of year.
Our hope is that ethanol stocks peak out around 24 million barrels in February/March timeframe.
Unleaded Gasoline
One concern regarding the ethanol industry is unleaded gasoline continues to drop, in fact it has fallen nearly a $1 in a month from $3.02 to $2.07.
Extremely cheap gasoline makes the incentive to be blending ethanol into our fuel supplies less attractive.
U.S. Ending Stocks
This Friday the USDA will release the December supply and demand report.
Corn had the average trade guess at 1.241 billion bushels which is up 59 bushels from last month.
Soybeans at 236 would be up 16 bushels from last month.
Wheat stocks at 578 would be up 7 bushels.
World Ending Stocks
The trade is expecting world corn to be at 300.9, virtually unchanged.
Soybeans at 102.2 unchanged form last month.
Wheat stocks at 267 down just a fraction from last month.
December Corn Chart
Corn prices set a new low last night to 6.35 just a fraction of a penny below yesterday’s low.
We did turn around and closed higher.
The fact that we were able to reverse and close higher was seen as lightly positive and enough to start hooking the technical.
The combination of corn closing higher and the technical trying to hook tells us the market may be interested in pushing up towards the 6.60 level.
November Soybean Chart
Soybean prices took our yesterday high and came within in 2 cents of hitting the highs from a week ago at 14.84.
Today’s close et 14.77 is the highest close we have seen going back to September.
This leaves our chart pattern in a very solid uptrend for now.
Technical indicators have turned up and are not yet overbought.
December KC Wheat Chart
Wheat prices rebounded nicely today, double digit gains across the board.
The chart looks better today than it did yesterday but its still in a downtrend.
Today’s sharply higher close was enough to turn the technical up and again it may signal this market is ready to test overhead resistance near the $9 level.
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