Morning Comments; February 7th, 2019

Corn and soybeans are trading lower this morning.

Yesterday’s ethanol data showed a large decline in ethanol production and grind back below 1 million barrels per day. Ethanol margins have been breakeven to negative since November, which is the longest stretch on record without positive returns. Reports show that margins have improved and are once again near the breakeven point. Due to widespread production cutbacks, analysts are expecting reductions of 25-50 million bushels in tomorrow’s report.

Spot corn and soybean values have been stagnate recently. Corn futures have traded within a nickel trading range for 14 days. Soybean futures have been within a ten cent trading range for going on 15 days. Tomorrow’s USDA release will contain plenty of data for trade to work through, possibly ending the streak.

US corn shipments continue to be strong, as current pace is running 92 million bushels ahead of the USDA’s forecast. Expectations are that shipments will slow as sales are trailing what is needed to fulfill USDA estimates by 74 million bushels.

Market Movers; pre-report positioning, South American yield data and Chinese negotiations.




 

Market Commentary provided by:

Karl Setzer Grain Commentary