HIGHLIGHTS
· Market Trend—Corn, Up 1-2; Soybeans, 4-5 Higher; Wheat, Up 3-4
· Deliveries: 29 SBO; 5 Wheat
· Today, talk of a scale-back in the Fed’s stimulus activities is weighing on global markets this morning. Asia was lower with the Nikkei down .6%; the Hang Seng lost 1.7% and Shanghai fell 1.5%. Europe was not quite so negative: the FTSE was steady to up .2% early-on as was the DAX and Frances’s CAC-40 was posting a .68% gain. The Fed will assemble again Dec 17-18. U.S. futures are in the red: Dow, off 14; S&P, 1.75 lower and the Nasdaq, down 5 ¼. Gold is .31% lower at $1,257/oz; energies are lower & the $ Index has slipped below 80.0, down .004 at 79.96
· T-storm Weather: A sharp pattern change is beginning across South America and it is likely to dominate for at least one week. Hot upper-level high pressure expands eastward from the Pacific Ocean to develop a multi-day period of heat across Argentina from Friday-Saturday forward; maximums reach the mid-90s to low-100s. The main uncertainty regards the longevity of heat: enough hints lead us to conclude it has the potential to last 5-10 days. Dry weather accompanies the pattern to rapidly improve conditions for corn and soybean planting across Argentina, though 30-day rainfall deficits are already notable at a few locations
· Dec Corn Up $.01 at $4.2850; Mar Corn Up $.02 at $4.38. The funds sold 3 K on Tuesday
· Jan SB Up $.0475 at $13.43; Mar SB Up $.0425 at $13.2625. The funds bought 2 K SB; 2 K SBM and sold 3 K SBO
· Dec Wheat Up $.0350 at $6.33; Mar Up $.04 at $6.4275. Funds sold a total of 5 K yesterday
CORN/SORGHUM
· USDA pegs U.S. corn 13/14 carryout at 1.792Bbu vs. average trade guess of 1.864 and 1.887 in November
· ATI Research: Boost in U.S. corn export forecast (+50mbu) was justified looking at historical early season sales pace while increase in ethanol grind (+50) was consistent with a 4% increase in corn use the 1st quarter of the year
· March 2014 corn futures traded to $4.40 ¾ on Tuesday—the highest price since Nov. 14—before closing at $4.36
· EIA report at 9:30 CST: Strong ethanol margins to keep production well above last year’s daily avg. of 824,000 barrels
SOYBEANS/WHEAT
· USDA pegs U.S. soybean 13/14 carryout at 150mbu vs. average trade guess of 153 and 170 in November
· ATI Research: Increase in U.S. soybean export forecast (+25mbu) was expected as was the bump in crush (+5mbu) with record large soybean meal sales on the books
· January 2014 soybean futures traded $13.53 ½ on Tuesday—highest price since Sept. 19—before closing at $13.38 ¼
· USDA pegs U.S. all wheat 13/14 carryout at 575bu vs. average trade guess of 547 and 565 in November
· New contract lows established Tuesday in March 2014 wheat contracts: CBT ($6.35); KC ($6.79 ¼); & MGE ($6.66 ¼)
· ATI Research: Surprisingly, no changes to Argentina wheat production/exports; trade range for crop size is 8-10 MMT
ENERGY
· Energy markets—weaker: QCLF14,-$0.09 at $98.43; QRBF, -$0.0152; QNGF, -$.03 and QHOF, -$.0008
· EIA weekly estimates (API): Crude, -2.5 (-7.5); gasoline, +1.8 (-6.3); distillates, +1.2 (+1.2)
· Cash ethanol markets were mixed again on Tuesday: Chicago off 3 ½; Gulf down 3; Dallas gained 2; Tampa up 3; New York declined 2 ½; while LA was 3 ½ higher at $2.62 ½ per gallon
· Significant decline in RINs: 2012’s off 4 ¾ to 27-32 ½; 2013’s down 3 ¾ to 29 ½-34; & 2014’s were 4 ¼ lower at 29 ½-34
· The January RBOB/January ethanol spread widened $.019 per gallon to $.6789 on ideas for higher output ahead
LIVESTOCK/POULTRY   ;
·   Choice boxed beef values eased 40-cents yesterday and are down 88-cents from a week earlier
· The USDA pork carcass cutout value firmed 61-cents yesterday and has gained $1.79 over the last four trading days
· Dec. hog futures fell to eight month lows yesterday on ample supplies of heavy weigh hogs and lower cash prices
· The USDA’s Iowa/Minnesota average cash lean hog price fell $1.86 yesterday to $77.56
Sources: Bloomberg, Dow Jones, AP, T-storm Weather