Markets for December 28, 2016

U.S. grain and oilseed futures jumped Tuesday, reversing a spate of selling prior to the Christmas holiday.

Contracts climbed as traders exited earlier bets that prices would fall, and speculated that Friday’s declines spelled an attractive entry point, though the markets overall were lightly traded in the first full session of the week.

Wheat futures led the gains, rising 4.1%, while soybean contracts climbed 2.6% and corn 2.7%.

Grain futures drew some support from weather forecasts that showed warmer and drier weather ahead for northern Brazil, a key crop-producing region, at a time when soybean plants are maturing and could be susceptible to low moisture..

Weekly grain export inspections detailed by the U.S. Department of Agriculture also showed a larger-than-expected increase for wheat, while corn and soybeans also gained, according to Dan Cekander of DC Analysis LLC.

Mainly, though, analysts attributed Tuesday’s gains in the market to traders shuffling positions prior to 2016’s end. Friday’s selling, which pushed soybean futures to their lowest closing price in five weeks and corn to a three-week low, provided a signal to some traders to close out short positions that pay off when prices fall, a process that involves buying contracts.

March-dated wheat contracts gained 16 cents to settle at $4.09 1/2, the highest closing price since Nov. 8. The gain nearly erased the previous five trading sessions’ steady declines.

January soybean futures added 25 3/4 cents to close at $10.14 3/4 cents a bushel, more than making up losses from late last week. Since the end of November, soybean futures remain 1.7% lower.

March corn futures also posted the first winning session in the past six trading days, closing 9 1/4 cents higher at $3.55 a bushel. Since the beginning of the month, corn futures have gained 5.4%.

Cattle futures ended the trading session mixed on Tuesday, as the outlook for supplies to continue to swell through 2017 offset optimism from the recent surge in cash prices.

Thinly-traded December cattle futures picked up 0.37 cent to $1.1495 a pound. Live cattle futures for February dropped 0.3 cent, %, to $1.16 a pound.

Meatpackers this month have competed with one another aggressively for available cattle, a reflection of stout demand for beef from grocery store and restaurant operators. The wholesale market for steaks, roasts and other beef items has stayed strong for longer than expected, widening margins for meat processors and providing more incentive for cattle buyers to pay up for livestock supplies.

Meanwhile, hog futures staged a recovery from last week’s selloff, as investors reeled-in bets that prices have further to fall due to the heavy supplies of hogs and pigs.

Lean-hog futures for February picked up 1.55 cents, to 64.75 cents a pound, after that contract dropped 2.3% last week.

Stocks are closing slightly higher in quiet trading on Wall Street, edging the Dow Jones industrial average closer to 20,000.      The Nasdaq composite closed at another all-time high.   The Dow gained 11 points,  to 19,945.

The Standard & Poor’s 500 index gained 5 points,  to 2,268. The Nasdaq composite climbed 24 points, or to 5,487.   Bond prices fell. The yield on the 10-year Treasury note rose to 2.56 percent.


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