Stewart-Peterson Market Commentary

Closing Commentary - November 30, 2015

Top Farmer Closing Commentary 11-30-15

CORN HIGHLIGHTS: Corn futures rebounded, gaining 4-1/2 to 5-3/4 cents as Dec led today's gains, closing at 3.65. The market more or less made up for Friday's losses when futures dropped on light volume and selling pressure. A lack of strong farmer selling and firming basis levels, especially in the eastern Corn Belt, continue to provide underlying support and have helped prices to consolidate in recent sessions. At present, we see no southern hemisphere weather that is consequential or threatening to either the corn or bean crops. With more acreage, this of course will be watched more closely as any disruption in crop prospects in the southern hemisphere could quickly relate to higher U.S. prices. The Environmental Protection Agency announced raising the renewable fuel standards today which opens the window for more corn to be used for ethanol. The new requirement is 14.5 bil gallon, a raise of 500 mil gal of ethanol.

SOYBEAN HIGHLIGHTS: Soybean futures rebounded today with gains of 7-1/4 to 8 cents. The technical recovery continues as the market posted a bullish key reversal a week ago Monday and a weekly key reversal by the time closed on Friday. Today's follow-through is on short covering as well as additional strength in the soy oil market. Some point to the recent recovery is an indicator that the U.S. may capture more export business in the near future as low doubt issues in the southern hemisphere ports have been hampered by rain. Export inspections at 67.4 mil bu was viewed as supportive.

WHEAT HIGHLIGHTS: Bear spreading was a negative feature for Chi wheat as front month Dec was the recipient of deliveries. Dec wheat closed 5-3/4 lower at 4.60, while March closed down 3-1/2. In addition, traders may have been rolling out of long Chi/short KC wheat as KC futures picked up anywhere from 6 to 7 cents today. With new contract lows established either on Friday or today, many wheat contracts look about as soft as they have all year. New crop July, however, managed to close up 2-1/4 at 4.92-3/4 and is holding well above its contract low from Sept 4 of 4.82-1/2. Yet, for most contracts, especially in Chi, today's prices again finished in the lower half of today's daily trading range, if not near the low for the day.

CATTLE HIGHLIGHTS: Cattle futures softened with losses of 140 to 220 points as of this writing with Dec leading today's drop, trading at 129.65. Feeders were also on the defensive with heavy selling today, losing anywhere from 390 to 415 points as March led the drop, last trading at 159.52. We're not shocked to see a down day. We didn't see the cash market develop strong enough to warrant another upturn in live cattle futures, and consequently, with firmer grain prices, both the live and feeder prices took a hit. Sell stops were also triggered as prices pushed through the 10-day moving average, a level the market held above all of last week. While the supply of cattle isn't concerning, the heavier carcass weights continue to suggest that there is ample supply both in the beef as well as hog and poultry sectors. Broiler weights are up, as is production, and with probably 6 to 7% more hogs this year, beef continues to struggle.

LEAN HOG HIGHLIGHTS: Hog futures witnessed bear spreading today as traders were exiting nearby front months with Dec trading 27 lower and Feb 72 lower, as of this writing, while deferred months were firmer with June leading today's gain, trading 65 higher at 73.25. Weaker near-term cash in cattle may have weighed over into hogs today which tried to hold on to positive gains early in the session but failed to do so. Estimated slaughter was 438,000 which compares to 431,000 a year ago. Cutout values were stronger this morning, gaining 1.29 and that's on the heels of a gain of 68 cents on Friday. Nonetheless, it appears that the nearby Dec contract may have reached its near-term high and is running into resistance near 58-1/2. 

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