December 29, 2016
Matt Erickson
Grain Marketing Specialist

Ethanol numbers will be released this morning

CORN (Up 2)
Corn pulled back on Wednesday as the dollar pushed to near old highs. Exports on Tuesday could not keep bullish momentum as a 2.4 bln bushel carryout looms over the market. Traders keep a close eye on carryout numbers as many analysts are suggesting the USDA’s feed/residual number currently used may be too large. This in turn gives a bearish sentiment to what carryout and grain stocks might be in the January 12th report. Argentina precipitation has been adequate as conditions seem to be fairly neutral at the moment. Ethanol numbers out this morning are expected to show a slight build in stocks as we enter the slowest time seasonally in regards to blender demand. Nearby support for March futures is found at $3.455 with resistance found at the 10 day moving average of $3.54.

Even with the pull back on Wednesday we are still up 23 cents for the week as Brazil is nearing a critical time for crop development. Rains are expected for many parts of Argentina and a trouble spot looks to be growing in NE Brazil. Harvest is beginning in Northern parts of Brazil with early yield reports looking pretty good thus far. Make sure to have your targets working for new crop bushels as we are still 50 cents above values seen a mere few months ago. Nearby support for November 17 beans is showing up at $9.8075 with resistance at $10.05. Below is a look at the day chart for November 17 beans with the 50 day moving average.

WHEAT (Minneapolis Up 3, Kansas City Up 2)
The wheat market was hit the hardest Wednesday with a strong dollar and Russia showing their first grain production number of the year at 73.3MMT versus the last USDA WASDE report estimate of 72MMT. Domestic wheat supplies remain ample as we are still faced with over a 1bln bushel carryout and a stocks to use ratio in the neighborhood of 50%. Spring wheat export sales over the last 4 weeks have totaled 28 mln bushels which is the 2nd highest total since 1997. Nearby support for Minneapolis March futures is showing up at $5.3025 with resistance at $5.45. Nearby support for Kansas City March futures is $4.0525 with resistance at $4.20.