Closing Grain & Soybean Comments Kevin Riesberg Friday, December 26, 2014 SOY-Complex: Beans rallied today on light volume with January option expiration the main driver though some support came from soyoil. Chart below notes that Malaysian palm oil has rallied the last 8 days due to monsoonal type rains/flooding causing some damage to the plantations. Meanwhile weather in S. America remains general favorable for growing conditions in Argentina/Brazil. Farmer selling was lacking today given the holiday mode. 8/13/2014 - 1/5/2015 (KUL) Price MYR T Malaysian palm oil futures ringgit/ton Daily /FCPOc1, 1BOc1 Price Line, /FCPOc1, Trade Price(Last) USc 12/26/2014, 2,250, +33, (+1.49%) Lbs Line, 1BOc1, Trade Price(Last) 12/26/2014, 32.46, +0.53, (+1.66%) 2,250 2,240 34 2,200 33.6 2,160 33.2 2,120 32.8 2,080 32.46 32.4 2,040 32 2,000 US soyoil cents/lb 31.6 1,960 Auto Auto 18 25 August 2014 02 08 15 22 29 September 2014 07 13 20 27 October 2014 03 10 17 24 November 2014 01 08 15 22 December 2014 29 05 Also traders are reluctant to establish fresh new shorts today in front of Monday's weekly export sales report. Trade estimates for Monday's report is 450-650k tons for beans, 50-200k tons for soymeal and 5-30k tons of soyoil. Deliveries next week against Jan beans and meal are expected to be light. Jan/Mar bean spread hovered in 6 1/4 to 6 1/2 range today. Resistance for March beans remains toward $10.60-10.75. CIF bean basis was soft with lack of traders. There is chatter that China has 1.0-1.5 mmt of US soybeans to book yet for Feb slot. CORN: Corn follow beans and meal with little farmer selling to seen after the holiday while Monday's weekly export sales report is expected to be solid at 500k-800k tons. Support came from Russia putting on a 35 euro/ton export duty starting on Feb 1st. This will effectively stop all grain/wheat exports until next summer. China's govt also is to auction off 5 mmt of govt reserve corn the 2nd week of January. If firms want to secure some of the coveted import permits, they must partake in this auction with the permits doled out according the amount of govt reserve corn a firm buys. Otherwise is was a very quiet day. US corn basis was steady to mixed with some plants sharply higher due to holiday week. Elevators report increased farmer selling though from $4.15-4.25 in March. Path of least resistance is higher next week or until we find farmer selling. WHEAT: Mixed trade in the wheat market as Russia's announced export tariff of 35 euro/ton was less than the 50 euro/ton that was rumored about on Wednesday. Probably more negative was the tariff doesn't start until after Feb 1st and this will allow most of the Egyptian sales to get shipped. Still about 4 mmt of wheat export demand will have to be shifted from Russia to other parts of the world, namely Western Europe, Canada and Australia. At this point US wheat is still too high priced to participate except for normal business to Japan, Taiwan and Latin America. Weekly export sales are to be 250-450k tons on Monday. The weather forecast calls for below normal temps for the southern Plains of -5F to -15F next week but trade is watching if the HRW gets enough snow cover first on Sunday/Monday (some forecasters are calling for 2-6 inches of snow in CO/KS area). Technically the wheat market is struggling with Chicago March needing to hold the $6.00 area otherwise the door toward $5.60 opens up. Market direction Sunday night will be driven by updated weather forecasts and outside markets. Have a good weekend! RJO’Brien Service is our trade 1|Page This material has been prepared by a sales or trading employee or agent of R.J. O’Brien and is, or is in the nature of, a solicitation. This material is not a research report prepared by R.J. O’Brien’s Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. 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