Headlines:
- Heavy supplies send wheat futures lower…
Chicago grain markets extended their losses, in a shortened session ahead of the long holiday weekend. Wheat is under pressure from hefty world supplies, including the large Black Sea harvest of the summer and the big Argentine crop which is underway. Ukraine’s agriculture ministry boosted its estimate of the country’s grain harvest by 200,000 tonnes, to 64.2m tonnes. The ministry saw the country’s total grain exports at 41m tonnes, up some 2m tonnes over last year. And in Russia President Putin said that the country’s grain harvest has reached 119m tonnes, which he called “a great result”. The Argentine agriculture ministry boosted its idea of this the wheat harvest currently underway, thanks to increased use of fertilizer. Argentine wheat production is expected to rise by 39% year-on-year, to 15.7m tonnes, compared to a previous forecast of 14.9m tonnes. “Global wheat prices came under pressure as Argentina raised their production estimates,” said CRM AgriCommodities.
- Argentine wheat harvest hopes raised again
The Argentine agriculture ministry boosted its idea of this season’s wheat crop, thanks to increased use of fertilizer. Argentine wheat production is expected to rise by 39% year-on-year, to 15.7m tonnes, compared to a previous forecast of 14.9m tonnes, despite a downward revision to planted area. The harvest was seen as 58% complete, as of December 15, the ministry said.
- 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:
Grain finished slightly lower this last day of trading before Christmas. Beneficial rains in South America continues to pressure US Grain futures. As has been the case for the week, Soybean led the markets lower but its losses were tapered given the series of double digit losses previously. March Beans was off 5 cents today. March Wheat was not far behind with a 3.50 cent loss and March Corn was close to being flat with a 1.50 cent loss.
Of particular interest was the large open interest put option at the 1000 strike. Markets will often gravitate and hold near the strike that has the largest open interest. This can also be viewed as a type of point of control. Trading activity was a bit light and normally the 1000 level would hold. That was not the case today for the January Beans contract. It finished 10 cents below at 990.
Crude Oil and the US Dollar were little changed on the day. The markets in general were pretty quiet since many traders have already taken off for the holiday leaving behind their underlings with instructions to simply hold down the fort.
