Market Update; Monday, March 11th, 2019

Trade is on the negative side after a mixed open. Oversold indicators gave the market initial support, as did thoughts the US and China were on their way to a trade resolution. Analysts are now rethinking the expected success of trade talks which has limited buying interest. The lack of supportive news in last Friday’s WASDE report is also weighing on today’s trade. Losses are being held in check by a hesitation to extend the current fund short position.

Corn futures are now more focused on weather as we approach the spring planting season. In may years we are seeing fieldwork take place across the Corn Belt within the next few weeks, but this is highly unlikely this year. Warmer temperatures are forecast for the US this week, but so are widespread rains. Funds are heavily short in the corn market, so to see a round of covering at any time would not come as a surprise.

Losses are being posted in the soy complex this morning despite an overnight sale to China. Last Friday’s confirmation of adequate carryout is weighing on the soy complex, as is the rapid harvest pace in Brazil. Improved weather conditions for late developing soybeans in Brazil is also negative. We are also hearing more concerns over current soybean demand and how many buyers will back away from the United States as a source if China keeps buying. As with corn, an already large short position in soybeans is limiting fresh selling.

Wheat futures are also in the red today as we see selling in the complex. New contract lows were established in wheat last week which has spilled over into the current market. We have seen several tenders for wheat in the past 48 hours, but the fact that these are needed given current stocks is negating any support they would provide. Concern over the state of the US spring wheat crop is providing the complex with light support.

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 gathered 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 800.858.3738, extension 411, or at ksetzer@citizenselevator.com . You can also follow Karl on twitter; @ksetzergrains




 

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