Market Update; Friday, February 15th, 2019
Lack of news and trade uncertainty weighs on trade.
Trade is mixed as we move through the day session, with little real interest being shown in the market this morning. Much of what we are seeing is positioning ahead of the three-day weekend for trade, as markets are closed on Monday for President’s Day. Trade will resume on Monday night at 8:00 PM ET. Trade is less confident of a quick resolution to the US/China trade dispute which is weighing on all contracts today.
Corn futures are struggling this morning from a lack of fresh news and limited trade interest. Buyers are unwilling to extend their long positions at today’s values which is limiting the complex’s strength. Analysts are predicting 2.5 million more US corn acres for this coming year which is adding to the negative tone of the complex. A 50 million bu reduction to projected corn demand for ethanol manufacturing is also a pressure point. Losses are being held in check by export demand which is perking up from an already better than expected rate.
The soy complex was strong to start out the session, but has now turned weaker as well. Early support came from a predicted 3.2-million-acre reduction to planted acres this coming year, but trade is not overly supportive of this figure. Basis is firming in Brazil on slow farmer selling which has raised the hopes for more export sales out of the United States. That said, a lack of confirmed progress on the trade issues with China are limiting soy advances. Updated export figures from yesterday showed cancellations of 29 million bu of Chinese booking and 16 million bu to an unknown buyer. This dropped sales to a net negative 22 million bu.
The wheat complex is the loss leader today with sizable declines taking place. A simple lack of interest is the primary factor for wheat losses. Wheat is not only being pressured in the US but around the world. This means to remain competitive, the US market needs to decrease as well. The complex is shrugging off a prediction for a 1-million-acre reduction to plantings this coming year. Bottom line is that wheat needs to generate buying interest in any form to support the commodity.
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 additional market information, feel free to contact Karl Setzer at 517.541.1449, extension 411, or at ksetzer@citizenselevator.com