1/3/13 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC
CLOSING GRAIN COMMENTS:
The late 2012 slide in grains which spilled‐over into the New Year on
Wednesday was met with some short‐covering and a bit of fighting spirit
on Thursday, as KC Wheat apparently finally found its weather legs. The
turn in Kansas City helped both Chicago wheat and corn find shortcovering
as well; but the soy complex continued its push lower as USDA
reported fresh Chinese bean cancellations during Thursday morning’s
A drop in open interest for the wheat market on Wednesday’s sharply lower
trade helped bring about, I suspect, a bit of profit‐taking by the shorts
on Thursday’s trade, especially in light of 6‐10 weather model forecasts
for the next 6‐10 days suggesting relatively dry weather for the southern
plains, and along with this drier bias the potential for a brief warm‐up.
Between this forecast and the updated weekly drought monitor comments—
suggesting that the recent precip. In the plains has done little to
mitigate the historic drought—traders seemed a little more inclined to
not sell the rally in wheat as Thursday’s close approached.
Further gains probably would have been made had it not been for a lateday
surge higher in the US Dollar after fresh Federal Reserve comments
sent outside market traders running for safe‐havens. As it stood, by
Thursday’s close, both KC and Chicago Wheat did drift back to slightly
lower on the day.
With wheat and corn able to find more positive price action into
Thursday’s close, the double‐digit, 5‐week lows in beans were also cut
heading into the final bell. In fact, lead‐month Jan. Beans were able to
make it back to the psychologically important $14 level by the end of the
CLOSING LIVESTOCK COMMENTS:
A march toward contract highs in February Live Cattle late on Thursday’s
session helped push the whole livestock complex back into the green after
a weaker opening for much of the complex. And this new high of
Feb.’s high of $133.95 put it within 50 cents of the December high and
within about $2 from its all‐time high made back in March for that
contract. Wintry weather heading for the major feed‐lot areas of the
Plains States this week, coupled with concerns of tightening market‐ready
supplies seemed to be the two major drivers to Thursday’s rally.
The rally in cattle was able to turn the front‐end hogs from weaker to
stronger by Thursday’s close; clients also reported increased interest by
packers for market‐ready hogs after lunchtime in Chicago, and this likely
lent some support. I suspect that the surges higher in the stock markets
from Wednesday were also lending some carryover support on Thursday’s
trade as well. The result was the best close in Feb. Hogs in 4 days and
also since the hogs and pigs report last Friday.
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Copyright, 2012 Global Commodity Analytics & Consulting LLC