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December 28th - Closing Market Commentary

12/28/2021
December 28th - Closing Market Commentary

Grains closed lower on Tuesday:

Mar Corn – 10 cents/bu (6.04 ¾ )

Jan Soybeans – 3 ¼ cents/bu (13.59 ¼ )

Mar Chi Wheat – 20 ½ cents/bu (7.83 ½ )

Cdn $ -0.00145 (77.99 cents)

WTI Crude Oil +0.45/barrel (76.02)

Tuesday saw light to moderate trading volume, as there was little in the way of new news in the marketplace.  Overnight gains in grain prices were erased as morning and noon weather maps showed the possibility of showers in the 6 to 10 day forecast for the driest parts of southern Brazil and Argentina.  The market will be anxiously looking for verification of this precipitation in upcoming forecasts, as many in the industry are discounting the likelihood of meaningful accumulations.  Despite this cynicism, the fact that there is any moisture in the forecast at all was viewed as negative.

Wheat was the weakest grain all day, and it’s weakness spilled over to the corn market, and ultimately the bean complex.  Wheat futures had a key reversal yesterday, closing lower after making new highs for the recent move.  Tuesday saw follow through selling on the break, which intensified losses when consumptive buyers were not there to support the market.  There is a belief that North American wheat millers are content to let the market drift in the short term before the look to acquire more wheat in early January.  The absence of any signs of export buying of wheat also has wheat longs a little nervous, although fundamentally, global milling wheat stocks remain tight.

On the day today, funds were believe to have been sellers across the board, liquidating an estimated 11,000 corn contracts (now long 360,000), 2,000 soybean contracts (now long 101,000), and 6,000 Chicago wheat contracts (now short 16,000).

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