Headlines:
- China and the U.S. have launched separate complaints against each other this week, with the WTO.
The US complaint alleges that China’s administration of tariff-rate quotas for Rice, Wheat and Corn breaches its WTO commitments. This marks the Obama Administration’s 15th trade enforcement challenge against the Chinese government regarding the country’s administration of tariff-rate quotas for Rice, Wheat and Corn.
- The US Department of Defense confirmed that an American oceanographic vessel operating in international waters in the South China Sea was captured by a Chinese warship.
- China’s currency weakened again overnight, to the lowest level in over 8 years. They are no longer the largest holder of US Treasuries; Japan now holds that distinction.
- CME grain futures will close early on Friday, December 23rd, at 1:05pm ET; markets will reopen on Monday night, December 26th at 8:00pm ET.
Summary:
The grain markets were choppy all week and today’s price action was no exception. The week in nutshell had showcased the Federal Reserve raising interest rates and delivering hawkish sentiment, quadruple witching expiration today, the US Dollar reaching 13 year highs and the US Equity markets reaching all-time highs.
Corn futures opened higher then dropped into the middle of the day only to recover by day’s end eking in a 3 tick gain when the dust settled. Generally speaking the large crop is expected to add pressure to the futures prices but that pressure may already be priced into the market. Reports are also showing that 2017 will have lower acres and that could serve to bolster prices.
Soybean futures fell for the 1st hour of trading but was stronger for the balance of the day. It finished the day inside of yesterday’s trading range but closed close to the top end of the day’s range with a gain of 7.50 cents. The chart is currently oversold and is at support so a run to overhead resistance may be in play next week as we head into the holiday break. Wheat managed to recover from early pressure. The low of the day was 404.50 but it finished at top of the day’s trading range at 411 (up 1.75). Wheat continues to hold above key support and will need to do so next week to avoid a potential meltdown.
