By: Dan Hueber –
We have entered into the final few days of trade for 2016 and at least for the grain and soy markets we have a positive bias. People are always out searching for post-Christmas bargains and maybe that mentality has bled over to the grain trade this morning as it would seem it would be difficult to find a better value. I read this morning though that there are always those who know no bounds when it comes to literally seizing a bargain during this time of Christmas good will and giving, as there were reports of no less than eight violent fights that erupted at shopping malls across the nation yesterday. Nothing says Peace on Earth and Good Will towards Men like a melee in the food court at the local mall.
While this could be a stretch, a portion of the strength this morning could be attributed to the numbers released on the quarterly hog and pigs report last Friday. All hogs and pigs came in at 104% compared with the expected 101.8%, kept for breeding was at 101% versus the estimated 100.3% and market hogs at 104% versus 102%. Initially after the numbers were released, February hogs pushed more than 2-cents lower but did recover from the extremes for the close. Regardless, it would appear that these figures should be enough to confirm that this initial advance that began for hogs back in October has run its course. Mind you, long-term I am not bearish on the outlook for hogs but as with any market, swings generally unfold in up and down waves not linear advances and declines to a point of fair value.
There has been a little discussion this morning concerning parts of Argentina missing out on recent rain but I have to imagine that the majority of the action is inspired by technical trade and year-end position squaring. Outside markets are offering little in the way of direction this morning either. Energies and metals are higher but so is the equity trade and the U.S. Dollar.