Blogging by the Bushel
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Market Report

Tuesday January 9th, 2018

March 17 corn closed up 1 ¾ at $3.49 and July 18 closed up 1 ¾ at $3.65 ½. March soybeans closed down 3 at $9.63 ¾ and July closed down 3 ½ at $9.83 ¾. March wheat closed up 4 ½ at $4.32 ¼ and July 18 closed up 4 ½ at $4.57 ½. Crude oil closed up $1.15 at $62.87.

The corn market established a classic “Turnaround Tuesday” bounce, spending the entire day in positive territory and closing almost two cents higher. It is very possible the large increase in open interest from yesterday’s sell-off was enough to convince some weaker shorts to “abandon ship”. Managed Money traders were believed net buyers of about 10,000 corn today, which would pare their net short back to roughly 255,000 contracts. Fresh corn news was almost non-existent this morning.  The absence of any real fundamental change likely made new shorts from the prior day. Light index fund liquidation was noted on the close, much like yesterday. The market absorbed it well, but for today at least, it may have kept corn from extending gains much into the close. The hottest debate continues to be seen regarding Argentina weather. Most acknowledge the potential for positive rain coverage this weekend into early next week, but there seems to be no universal consensus on how much or how widespread such rain will be. No doubt, this is going to be extremely important for crops down there that are tasseling. Brazil conditions remain near perfect, which is of greater interest to soybeans.

Soybeans are struggling in front of the crop report as they should. Trade is expecting US soybean carryout to increase by about 17 mb on avg. due to a reduction in exports while World stocks increase by 740 mt on larger US and Brazilian supply and production more than offsetting a cut in Argentina’s crop.  Ultimately whether it is this report or in future reports, the current pace of export activity suggests a more significant cut to exports and signs of a possible turnaround before South American new crop arrives are not encouraging. For now, soybean remain within their recent range with resistance in the $9.70 to $9.75 March area and support against $9.55.

Wheat saw mixed price action throughout the night, but leading up to the morning pause prices weakened and trade finished slightly lower across the board. Uncertainty around the Egyptian tender overnight initially leading to no offers from Monday afternoon’s GASC tender may have been behind the weakness. By the time the markets re-opened, news surfaced that Egyptian officials had talks with the selling firms leading to several offers. There will be a lot of data to absorb in Friday’s report, as it includes an estimate of winter wheat acres. For wheat, winter wheat acres will be watched the closest.

Anna Kaverman

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