Written by Chris Robinson
Corn: March corn settled up 5 ½ cents at $7.02 while new crop corn CZ settled up 3 cents at $6.06 ¾. For the week, CH lost 28 ¾ cents, while CZ lost 21¼ cents. A quiet end to the week after the fireworks we had earlier as CH only had an 8 cent sideways chop with most of the activity occurring between 7AM and 9AM before the pit trade was even open. January options expiration proved to be a non-event for the most part. The market continues to digest Informa’s Wednesday bearish surprise of a prediction of 99 million acres of corn production for 2013. Bearish items included lousy exports for the week and the lack of a good South American “weather scare” story. All in all a tough week for the perma- bulls. From a chart point of view, it was interesting that Thursday’s trade only partially filled the July gap, halting at 6.87 ½ , and leaving a 4 cent gap down to the top of that 5-month old event. The funds remain long an estimated 290,000 contracts even after selling 30,000 contracts in the last 3 days. Support below comes at $6.83 ½ and then $ 6.44. Resistance above should come at $7.21, $7.37 and then $7.69. Hedgers: No Change in recommendations.
Wheat: March wheat settled up 1 ½ cents at 7.92 while new crop WN settled up 1 cent at $8.08 3/4. For the week, WH lost 22 cents and WN lost 25 cents. WH had a quiet 10 cent trading range and mirrored the corn today with most of the activity occurring prior to the pit opening. Taiwan, South Korea and Japan were small buyers of US wheat overnight. US Soft Red Wheat at the gulf remains the cheapest in the world at $319/MT at the Gulf. This compares to Argentine wheat which is offered at $380.00/MT. At some point, you would think this will help US exports. However, the FSU continues to export wheat, even though for the past 4 months they’ve been telling the world they have no more to export. The market had a $1.13 haircut in the last 16 trading days. That works out to about 7 cents a day, every day. January option expiration today proved to be a non-event. Support for WH comes at $7.82, $7.76 and then $7.55. Resistance above comes at $8.22 and $8.50. New crop WN has support at $8.00, $7.81 and then $7.54. Resistance above comes at $8.37 and $8.50. The funds are now short an estimated 4,000 contracts. Hedgers: No Change in recommendations.
Soybeans: Tonight we are switching to March beans from January, now that the options have expired. March settled up 24 ½ cents at 14.29 ¼ while new crop SX settled up 12 ¾ at $13.00 ½. For the week, SH lost 62 ¼ cents while SX dropped only 17 cents. The beans posted a low overnight in quiet trade, but then trended higher all day once the pit opened at 9:30AM. SH had a respectable 17 cent rally through the afternoon and only had a small bout of profit taking in the last 5 minutes of trade. The last 5 minutes had an 8 cent range as traders scrambled to book profits in front of the holiday weekend. On a positive note for the bulls, we finally escaped a trading day without news of another cancelled sale to China. Also positive was the fact that $14.00 held as support for SH and $13.00 held for SX. January options expiration today proved to be a non-event. Support for SH comes at $14.02 and the 6-month low posted on November 16th at 13.72 ¼. Resistance above for SH comes at $14.50, $14.75 and then $15.08 ¾. SX has support at $12.83 ½ and then 12.55. SX has resistance above at $13.40. The funds remain long 110,000 contracts even after selling 30,000 contracts in the last 3 days. Hedgers: No change in recommendations.
Monday we will have shortened trading day, closing at 12PM CST. This week we posted 5 month lows in old crop corn and old crop wheat. The entire nation awaits a resolution to the budgetary fiscal cliff in Washington. The stock market was down over 200 points at one point today, but came back to settled down “only “132 pts. On January 11th we will get the final 2012 USDA crop report. 4 out of the last 5 years this January report has given us a “LIMIT” move either higher or lower. The ancient Romans had an expression, if you want peace, prepare for war. Si vis pacem, para bellum. That applies today. If you have unknown price risk, allow us to help you prepare to meet that risk head on.
From all of us here at Top Third, have a great and safe weekend and Happy Holidays!! I think I speak for all us when I say I am glad the Mayans were mistaken.