Written Commentary
CLOSING COMMENTS
Macroeconomics:
Natural Gas has made a V-shaped recovery from it’s early November lows to close above the early October highs. Cold weather moving into the heart of the US fwill have many cranking the heat. Nat gas is historically cheap due to a large reserve supply and mild weather in October and November so far.
Ag Fundamentals:
This morning’s flash sales of soybeans was not enough to keep beans supported against a fruitful global supply. South America’s favorable weather going into arguably their most important growing month, December. Ethanol margins have dropped back due to a slight rally in energy and corn prices avoiding a major selloff. December futures first notice day and options expiration ins tomorrow. Many will have rolled out of their December positions be en of trade Monday next week. If tensions escalate north or south of the Black Sea, wheat will be the first to react. Today was the first day wheat closed lower since rockets started to mark the sky over Ukraine and Russia over the weekend.
The Next 2 Week Precipitation Forecast for Brazil is showing a few spots expecting less than 1 inch of rain, but this is not enough to stress the bean market.
Calendar Spreads
Spread | Last | Chg | Full | % of FC |
CZ24/CH25 | -9 1/2 | +1/4 | -31 | 31% |
SF25/SH25 | -7 1/2 | +1 1/4 | -26 | 29% |
SH25/SK25 | -13 1/2 | – 1/4 | -26 3/4 | 50% |
SF24/SN25 | -33 3/4 | +1 | -79 1/4 | 43% |
MWZ24/MWH25 | -14 1/4 | +1 | -30 1/2 | 47% |
WZ24/WH25 | -20 3/4 | -1 | -23 3/4 | 87% |
KWZ24/KWH25 | -11 3/4 | – 3/4 | -24 | 49% |
Cost of Carry
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
>>Interested in more commentary by Joe Mauck? Go HERE
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