Morning Comments 12/13/2013
Friday, December 13, 2013, 8:26 amSubmitted by: Kyle Lehman
The markets continue to slide lower on carryover weakness from yesterday’s trade. Soybeans are leading the way lower (down 10c) on fears of reduced demand from China due to new cases of bird flu. With demand slowing and margins being squeezed the trade expects some cancellations from China in the next 4-6 weeks. Corn futures remain under pressure after a group of 10 bipartisan senators proposed a bill to completely eliminate the corn ethanol mandate. Ethanol margins remain at 2 year highs and production should remain at capacity even with all the news of RFS reductions/eliminations. The world seems to be swimming in wheat confirmed by last week’s USDA S&D. Wheat prices have fallen 7% in December which is weighing on the corn market.
The US weather looks to warm up early next week before another cold wave moves through. Although most of Iowa will still remain below freezing temps upper 20’s will be a small relief to the single digit highs we have seen lately. South American weather is expected to be hot and dry over the next 10 days which should allow late plantings to finish up. The 11-15 day forecast follows up with some chances of decent rain.
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