AM Comments 12/01/15
Tuesday, December 1, 2015, 8:12 AM
Submitted by: Dustin Weiner
Firmer markets this morning as we see follow through buying from the firmer close yesterday. Looking at the charts, if we can close firmer today that may trigger some short covering which could give this market a little pop. The Commitment of Traders report yesterday showed the funds a little shorter in corn and soybeans than anticipated which adds risk to the upside if they decided to trim those positions a bit.
In other news yesterday the EPA released its final ruling on biofuel targets, coming in slightly higher than what was proposed in May. They put a stamp on the 2015 ethanol blending requirement, calling it 14.05 billion gallons. This falls in line with the demand we saw this year which isn’t overly surprising to the market as the info was released with only one month left in the year. The mandate for 2016 was increased by 500 million gallons to 14.5 billion gallons which should follow through with a slight increase in projections for corn used for ethanol. For what it’s worth, ethanol demand and usage tend to run above the required EPA mandates most years.
Overall for today we are experiencing a technical bounce with Jan beans now above their 50-day moving average and March corn above its 20-day moving average. The way we close today could be a short term signal of things to come.
Corn 2 to 3 cents higher
Soybeans 3 to 6 cents higher
Have a great day!