The corn market was mixed on Wednesday on sloppy trade with the early close and many traders gone for the holiday and the limit up close in the wheat providing some support late in the trading session. The March contract closed ½ higher as the market seemed to just chop around looking for direction. Exports were strong Tuesday night as both So. Korea and Taiwan bought US corn. Volume was light, as expected, and funds were mixed at the end of the day. The corn market seemed to find support on aggressive export sales and the unexpected strength in the wheat market and the pressure coming from the huge supply of US corn and the weather in So. America remaining conducive to crop development. Traders also pointed to traders squaring their positions as many traders will not be working on Friday in an abbreviated session. Cash traders pointed to steady prices because of the Thanksgiving holiday.
eCBOT market was a little higher overnight on light trading. Traders are keeping an eye on the outside markets as we have crude lower this morning and the US$ a little weaker. Weekly export sales this morning were once again impressive at 1.845 mil vs. estimates of 1.3-1.5 mil. This is a better number, but not unexpected with the USDA announcements this week, especially with all the corn going to So. Korea. Chinese government agency said overnight that China's corn prices will remain stable at the current prices and corn output will be higher than last year. But, remember, we have been preaching that traders shouldn't listen to Chinese rhetoric and watch their actions. This has been the way they do business in the past and the way they will do business in the future. The corn market today should open unchanged, 1 higher and we will see if the market can hold the gains. Important US$ trade overnight as the market tried to bury the US dollar against the major EU currencies and the market reacted by buying dollar. The US$ is up a little this morning but way off the lows from last night. The US$ vs. Euro Currency last night traded 149.77 which is very close to the 150 level that traders have been talking about as being a possible high. A higher US$ should have a negative impact on US grain export sales vs. other sources.
Grain markets close at 12 noon CST today.
eCBOT Overnight
Contract Last Net Change High Low
ZCZ7 383^2 1^2 384^6 381^0
ZCH8 400^0 1^2 401^6 398^0
ZCK8 410^2 1^4 411^6 408^4
ZCN8 419^0 1^4 420^0 416^4
Early Opening Calls: 1-2 higher
Top News
**USDA Corn 07/08 Export Sales Net: 1.845 mln mln mt; 08/09 Net: 1,500 mt
-- Russian Ag minister was quoted by news services saying the country may add additional grain export limits in January or February 2008
-- EU resale tender results show 39,815 mt of Hungarian grain was tendered on Thursday
-- Dalian May Corn futures rose 22 Yuan/mt to 1787 Yuan/mt with 1.04 mln contract traded
-- eCBOT Corn Vol: 84,220; Pit Vol.: 29,518; Open Interest change: +3,398
-- Weather: Active U.S. weather pattern will occur over the next week to ten days as systems march across the nation while cool air spills southward from Canada.
-- Outside markets. Energy: Jan crude at $96.41 down 88c, products lower; Gold $10.90 higher at $809.50 & Silver: 13c higher to $14.55; US $ higher vs. Euro, off against the Yen in electronic futures markets
If you have any questions, or if you would like to discuss specific trade recommendations on any markets, contact me directly.
Jim Riley
Linn Group
877-787-6278
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