Grain Market Chatter Closing Comments12/31/2015

Closing Comments

Lynn Miller

December 31^st, 2015

What would it be to end a year and not have a Top Whatever list.  So, with the help of Advanced Trading, here are the top 4 topics that I feel have had the biggest impact on the grain markets in 2015.

1. El Nino.  Weather is the number 1 factor to volatility in grain markets.  This year it was, and continues to be, a pain.  El Nino gave basically everyone east of the Mississippi River greenhouse weather and record bean yields.  Then left the areas west of Mississippi with excess moisture, prevent plant acres and yield reductions.  Now, she’s playing with South America as we wait and see what kind of moisture they will get the next two weeks.
2. Bird Flu – The Poultry Industry was devastated in Iowa, Minnesota and South Dakota. Some of these flocks are just now getting back into production.  This outbreak was hard on the corn market and sent egg and turkey prices soaring.
3. Strength of the US dollar.  Or maybe I should say the lack of strength in all other world currencies.  This is making the Black Sea, and every other country, more competitive than then us on the world stage.  Funny how money talks and bs walks isn’t it.  So much for better product or long standing relationships.
4. South American production.  Just like the US had ideal growing weather, so did Brazil last year leading to once again record corn and bean production.  They had record double-crop yields in corn, while the favorable exchange rate led to a 7% increase in planted acres.  Ample stocks make for stiff competition and SA origin is taking business from the US.

Corn:

Corn sales this week totaled 705,200t which was to the higher side of the trade guess, but not enough to start any fires out there.  Top that with no changes to South American weather and we got a  ho-hum kindda day.

Technically, all three indicators continue to be bearish the March futures.  The stochastics appear to be confused, once again and in no hurry to get out of oversold territory.  Nearby support has once again fallen and now sits at $3.57.  My selling targets would be $3.66, $3.70, $3.75, $3.82 followed by $3.92.

Soybeans:

Export sales were worse than disappointing.  The trade was looking for between 1.0 and 1.4 mt, we got 478,000t that took the air out of the sales real quick.   Add to that no changes to the South American weather forecast and down we went.  I was actually quite surprised that we didn’t fall double digits today with the light volume.

USDA did announce a 119,000 metric ton sale of beans to China prior to the open this morning, but this will go into next week’s numbers.   Biodiesel production was unchanged.
Technically, all three indicators continue to be bearish the March futures.  Nearby support continues to hold at $8.54.  My selling targets would be $8.62, 8.72, $8.80, $8.88 then $9.12 and $9.34 if you really want to reach.

Wheat:

Mediocre exports at least allowed us to stay unchanged today.  Sales totaled 363,500t right within the trade range.  One thing we have learned the past couple of months is that weather is not the main driver in this market for now, the funds are.  But other than that, with no fresh news or scares around the world we remain status quo.

Technically, all three indicators are again bearish the March Minneapolis futures.  The stochastics remain neutral, not issuing a buy or sell at the moment.  We have faded away from the 10-day moving average and appear to be consolidating on the bottom side of recent trade..  Nearby support appears to have held today at $4.90.  My price targets now would be $5.05, $5.15, $5.25 and $5.32.