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Market Report

Tuesday January 23rd, 2018

March 17 corn closed down ¾ at $3.51 ¼ and July 18 closed down 1 at $3.68. March soybeans closed up 2 at $9.86 ¼ and July closed up 2 at $10.07 ¾. March wheat closed down 4 ¼ at $4.21 ½ and July 18 closed down 4 at $4.48. Crude oil closed up $.88 at $64.31.

Overall price action today was the polar opposite of Monday, yet the end result was more or less the same.  Futures were lower to start, did just enough to the downside to run stops below $3.50, and then floated back to finish fractionally lower.  The funds were viewed net sellers of about 10,000 contracts today, which would take their net position in corn back up to around 255,000 net short. Early morning news flow was exceptionally quiet, even for corn in the dead of winter. Export buzz was a major feature again today, though unlike Monday, most of that was to Ukraine.  The USDA did report 256,000 MT of corn sold to “unknown” under daily reporting this morning. Weekly EIA report is expected out at the normal time Wednesday. After surprising with larger ethanol production last week, do not be surprised if the gov’t backs off those projections, likely to the tune of a 1-2% wk/wk pullback. Demand could also back off a touch. South American weather has been put on the back-burner again for a moment not worrying enough to trade, yet just compelling enough not to completely dismiss. Second crop corn can be planted into the end of Feb. Elsewhere, analysts at Informa updated their thoughts on US acres. They expect 89.2 million corn acres vs. 89.7 prior and 90.2 mil planted last year.

Soybeans threatened to end their winning streak in a two-sided performance but rallied back to settle higher for a 7th consecutive session. Meal made a similar trade by shrugging off early sell pressure to close higher. News and trade was quiet today with the market focus remaining on weather primarily.  This is a classic weather scare rally in a longer term oversupplied bear market in beans. Near term forecasts continue to promote overall stressful conditions in Argentina with too much heat and too little rain while Brazil’s harvest could be delayed and susceptible to disease by too much moisture in the outlook. Elsewhere in the news, Informa 2018 acreage estimated soybeans at 91.197 million acres this is a reduction from their previous estimate by .200 in beans.

The wheat complex was under pressure throughout the day and finished the weakest. Very little fresh influential news to talk about, so after testing the market’s pre-report range yesterday and not going anywhere, the recent bullish enthusiasm seemed to run its course. Don’t really know how far the markets can rally anyways. Expect to see selling scale up in Chicago between $4.25 -$4.35. The USDA said that its weekly export sales report will be delayed until Friday because of the federal government shutdown. Informa updated its 2018 acreage estimates this morning. They pegged all wheat acres at 46.1 million, including 32.6 million winter and 11.25 spring. Despite this past week’s disturbances at its ports, Russian grain exports continue to be well ahead of last year’s pace. Just what the country was hoping for after a record grain crop of 134 MMT this past year.

Anna Kaverman

anna@mercerlandmark.com

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