AM Comments 11/30/16
Wednesday, November 30, 2016, 1:11 PM
Submitted by: Dustin Weiner
Our markets popped higher overnight with the soy complex leading the way due to short covering and potential demand increases from China thanks to strong margins for both crush and pork production. Also lending support is a firmer crude oil market as OPEC countries meet in Vienna and discuss whether or not they will agree to cut production. With crude oil currently over $3 a barrel higher, the trade must feel that they are closer to an agreement. This crude story could be a main driver of commodity prices today.
Yesterday we saw heavy fund selling as the funds were estimated to have sold over 23k contracts of corn and 6k contracts of soybeans. This ended soybeans’ streak of 7 consecutive higher days as January beans failed to make a new high and triggered profit taking. Also yesterday, the USDA released it’s “baseline” projections for the 2017 crops. I won’t say that this report gets ignored – but it is not heavily traded as they just use statistical guesses to estimate acreage and yields for next year. The numbers were in line with most trace estimates (90 million acres of corn (down 4.49m acres from LY) and 85.5 million acres of beans (up 1.8m acres from LY)). This had very little impact on trading.
Overall for today we look for higher markets with most of the support coming from crude oil. If that holds there is a good chance we stay higher all day but I wouldn’t be surprised to see a choppy trade…
Corn 2 to 4 cents higher
Soybeans 6 to 8 cents higher
Have a great day!
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