Blogging by the Bushel
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Market Report

Monday February 11th, 2019

March 19 corn closed down 1 ½ at $3.72 ¾ and December 2019 closed down 1 ½ at $3.97 ¾. March beans closed down 9 ½ at $9.05 and November 19 closed down 8 at $9.49. March wheat closed up 1 at $5.18 ¼ and July 19 closed up ½ at $5.22 ¾. Crude oil closed down $.31 at $52.78.

The corn and soybean markets started the week off on a down note. Beans led the break on follow through from Friday’s crop report. That report for beans while less bearish than feared, still highlighted record domestic and global stocks and today’s price action better reflected that reality than Friday’s. $9.00 front month beans represent key support with the uptrend still intact for now. In the case of corn, the selling today was influenced by the weakness in beans but really had more to do with follow through from the negative technical developments on Friday including an outside day lower and violation of the uptrend. The corn market is long and liquidation that began on Friday continues today.

The lower soybean board tugged meal flat price into negative territory as well although the oil share spreading helped to provided needed underlying support to meal which is already down against contract lows. The meal exports confirmed by the USDA were not much of a factor today. It was a quiet day from the trade war headline front. We would expect that to be the exception and not the rule from now on up to the March 1 deadline. Negotiators are in Beijing this week with the high-level reps stepping in for Thursday Friday as the lower level teams lay the ground work through Wednesday.  Negotiations may return to Washington next week if progress is being made. Time is running short with big hurdles to overcome if an agreement will be made by March 1st.

Weekly grain inspections data for export showed corn inspections of 744 tmt falling short of expectations for closer to 1 mmt, wheat inspections of 562 tmt were a little stronger than expected and soybeans at 1.063 mmt were also a little stronger.  Corn inspections to date are 23.209 mmt compared to 15.736 mmt this time last year, wheat inspections to date are 15.389 mmt vs. 17.143 and beans 22.628 mmt vs. 36.051.

The wheat complex was able to battle back after a tough opening half of the day and finished the session mixed. The stocks data from Friday’s crop report is going to make it difficult to sustain rallies especially in new crop. It is bad enough to see a 1.0 bil carryout, but to get to that number without adjusting exports lower is a huge concern. To make current USDA export projections of 1.0 bil bu, wheat exports will need to average almost 700 TMT per week for the rest of the marketing year, and thus far this year, that has occurred a whopping one time. The market is already projecting an increase year over year in World production. It is almost a necessity for the US to lower their acreage year over year just so some of those stocks could get depleted. If China comes swooping in and buys 5 MMT of wheat everyone will win.

Anna Kaverman

anna@mercerlandmark.com

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