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Three things for 2013

12/27/2012 @ 1:57pm

News is scarce during the holiday weeks and any regular weekly news gets released at odd times. So Friday morning, the weekly ethanol numbers (usually Wednesday) and the export sales report (usually Thursday) will be released.

Adding to the most newsworthy day in a while will be the USDA’s quarterly Hogs and Pigs report. The prereport estimates are generally 99% or 99.5% of year-ago numbers. So there shouldn't be much change in hog numbers despite the rally in corn and meal prices.

Finally, there will be a Commitment of Traders report on Friday afternoon. These weekly reports have been attracting attention as the market attempts to gauge how quickly/slowly speculators are throwing in the towel on their long grain positions. They’ve certainly trimmed back, but without a great bull story, are they done?

Things to Think about for 2013

  1. What are U.S. prices vs. the rest of the world? With U.S. crops so small, other countries (Argentina, Brazil, Ukraine, Russia) have cheaper prices for corn and soybeans. Actually, U.S. wheat prices in the world market are very cheap right now. Can this spread to other ag commodities?
  2. How is South American weather in January and February? It’s been too wet in parts of Argentina and too dry in parts of northeast Brazil. But the important season of grain fill/pod fill is still to come. What’s the weather forecast?
  3. How does the market react to the crucial January 11 reports? Does price have more work to do to reduce use? And how quickly does everyone shift gears to thinking about the upcoming planting season?      

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

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