The Phantom Bull |

The Phantom Bull

Jan 12, 2018


Market Watch with Alan Brugler

January 12, 2018

The Phantom Bull

For some reason, I started this big USDA report day with the tune from “Phantom of the Opera” in my head. My musical tastes are pretty eclectic, but this was still a stretch. I didn’t even hear that Andrew Lloyd Webber song to get it stuck in my head, which the Germans would call an earworm (it burrows in and won’t come out!). I checked out the lyrics, and there are absolutely none that fit my occupation of the day. Believing your unconscious brain sometimes is providing answers, I looked for other Webber songs that might be relevant to the markets. By title, a few that seemed apropos included “I Don’t Know How to Love You”, “Any Dream Will Do” or “Don’t Cry for Me, Argentina”!  At least the last one could be tied to USDA cutting their Argentine soybean estimate today. In the end I went back to Phantom.  The character is hiding in the shadows and not seen by the leading lady for a good part of the musical. That was all I needed!  It’s the Phantom Bull Market, lurking in the shadows and strongly desired by grain producers everywhere. The beans sang a little solo today, but maybe we can coax some best sellers out onto the stage eventually!

Corn futures fell a nickel (1.42%) in a week that saw the USDA project another record US yield. Separate private export sales totaled 442,100 MT throughout the week as reported through the USDA’s daily reporting system. Ethanol production for the week of Jan 5 dropped to 996,000 barrels per day, as stocks of ethanol grew to the largest since late May at 22.719 million barrels. The USDA showed export sales picking up to 437,745 MT during the week ending 1/4, an improvement over the previous week but still 27.44% lower than last year. The USDA Crop Production report showed the US corn yield 1.2 bpa higher than December at a record 176.6 bpa Friday morning. That caused production to increase, but it was limited to just 26 mbu due to ~400,000 fewer harvested acres. December 1 corn stocks were 12.516 bbu, and 130 mbu larger than last year. South American production was left unchanged, although analysts had been expecting to see a smaller crop. That caused projected world ending stocks to increase 2.49 to 206.57 MMT. Friday’s Commitment of Traders report showed managed money adding 23,940 contracts to their net short position in the week ending…

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