Hurricane Sandy Doesn’t Blow Markets Off Course

Hurricane Sandy rocked the East Coast early this week resulting in several days of closures for the stock market, many government agencies, and businesses. After reopening Wednesday, the Dow has rallied 125.41 points to close Thursday at 13,232.62. Oil is down 23 cents a barrel as demand concerns persist. Gold is up $3.50 an ounce, while the dollar index is slightly weaker. The grain markets have had volatile trade and are mixed on the week.

Corn is up 12 ¼ cents on the December contract to close at $7.50 Thursday. Harvest is nearly complete across the nation at 91%, but has fallen off the record pace. This year now matches the previous record pace set in 2010. Demand is being closely watched as well. Ethanol did see an uptick in production by 3%, but still lags last year by about 10%. Stocks of ethanol increased this week by 2.4% and are larger than last year by 11.75%. Export sales will be released tomorrow, delayed a day by Sandy, and expectations are for about 100,000-350,000 MT being sold.

Soybeans have run into heavy resistance on the daily chart for the January contract in the $15.65 area. So far for the week, the oilseed has lost 3 ½ cents a bushel to close at $15.60 ¼ today. Harvest progress is nearly complete for soybeans as well, coming in at 87% finished in this week’s report. Some concerns have begun to pop up about too much precipitation in key growing areas of South America, in particular Northern Argentina and Southern Brazil. This will have to be monitored in the coming weeks. Export sales expectations are for 550,000-700,000 MT for last week.

Wheat continues in its sideways channel and is up 3 ¾ cents to close at $8.67 ½ on the December CBOT contract. This market has been range bound for several months now with little, if anything, to drive it out of this range. World production is still a concern as harvest delays have occurred in South America, while Australia is experiencing production reductions. Domestically, emergence of the winter wheat crop is behind the 5-year average due to dryer than normal conditions. The initial crop ratings show the winter crop at 40% good-to-excellent, which is one of the lowest ratings in recent years. Expectations for export sales tomorrow are for 350,000-500,000 MT.

Early this week Hurricane Sandy threw a wrench into the schedule for many markets and report releases. After the winds and rain left, the markets resumed to rally higher for the equities and trade mixed for the commodities. Harvest is nearly wrapped up domestically, so attention will turn to South American weather in the near term. Looking ahead to next week on Friday, the next round of USDA/WASDE reports will be released, barring any weather delays.

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