Market Update; Friday, January 11th, 2019
Markets consolidating ahead of the weekend.
Much of what is taking place in the market today is simple consolidation. We have seen wide swings in the market this week from both sides, and traders simply want to shore these up ahead of the weekend. This is not just for commodities, but for the financials as well. This was most noticeable in crude where a $34.00/bbl recovery has stalled out.
Corn futures are showing gains today as we see light short covering and positioning. Fundamentally corn has been taking support from thoughts Brazil will seed fewer acres this year due to the current drought-like conditions. While this is possible, it is not a given. We are receiving mixed signals on the Argentine corn crop, as crop ratings are lower than a year ago, but private analysts have increased their estimates on total crop size. It appears as though the Argentine corn crop is not as bad as thought. Corn is being limited bu heavy shipments out of the Black Sea region. Interesting to see twice the volume of ships lining up for Brazilian corn than last year at this time.
Soybeans also posted minimal advances to start the day trade as we see more analysts lower their Brazilian crop size projections. Yearly production will still be up though, so any decline may simply prevent world soybean stocks from swelling even more than they already have. Concerns over the condition of the crop and what impact it may have on quality starting to surface. Reports indicate China has booked 184 million bu of US soybeans recently, but this is mostly a rumor at this time. Brazilian soybeans currently being offered at a 15 to 20 cent discount to the US which is causing some doubt over total exports.
Wheat futures are posting solid advances today as we see more active buying in that complex. This is mainly from demand as we continue to see buyers show up for our export offerings. Canada and Russia are showing record exports as well though, which has tempered the demand for ours.