Market Update; Wednesday, January 16th, 2019
Outside Markets SUpport Commodities
Trade is mostly higher today as we see light buying in nearly all markets. This is in part from technical indicators but also from economics. Signs that the US economy is not as weak as believed is giving buyers confidence. We are also seeing news out of China that the country is starting to see an economic slow-down due to the ongoing trade dispute with the United States. This could end up giving more support to ending the trade war than anything we have seen until now.
Corn futures are benefitting from solid buying interest this morning due to a technical bounce. This came after yesterday’s losses which were a result of better than expected rains in South America over the weekend. News that China is going to expand corn production by 15 to 20% this coming year also weighed on corn yesterday. It is unlikely we will see the increase to corn acres in the US that some analysts have predicted limiting losses in corn though. South Korea was in and bought optional origin corn which is also giving the complex support this morning.
Soybeans are building off the solid crush report yesterday that topped trade estimates and previous monthly totals. We are also seeing more buyers step in for US meal. We have seen the 3rd vessel of US soybeans leave port for China this month, which is also supportive. Technical resistance is limiting the advances soybeans are able to post, as is the possibility of even more production in the US next year.
Wheat is also on the positive side this morning. This stemming from thoughts that winter-kill may be larger than expected this year due to a lack of snow cover. Reports of uneven stands on winter wheat is also lending support to the futures. Advances are being held in check by a better rated Argentine crop and forecasts for elevated production in Russia this year.
This commentary is the sole opinion of Karl Setzer. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is used from a variety of sources believed to be accurate. If you have any questions or would like addition market information, feel free to contact Karl Setzer at 517.541.1449, extension 411, or at ksetzer@citizenselevator.com