Market Update; Wednesday, January 23rd, 2019
Market rebounds following break-down in trade talks. South American weather lends support.
Corn, soybeans, and wheat all traded high in the overnight session as we had a correction from yesterday’s losses. The weakness we had in the market yesterday was the primary result of talks breaking down between the US and China on trade. Basically, China was told not to come to the US for preliminary talks ahead of the official meeting at the end of the month. Trade will keep on eye on these developments for hopes of added commodity demand.
Corn futures are finding support this morning from export demand as last week’s loadings were at the top end of expectations. Cumulative loadings indicate we will fall short of yearly expectations though, which is slightly negative. This slow start to the export program is being countered with the weather situation in Brazil and how it could easily cut their corn production and bring even more buyers to the US for needs. The US is the most competitively priced source for corn in the global market to help with our export demand.
Soybeans are higher today as rains in Brazil this week have been less than expected. In fact, analysts claim these have done little to benefit drought conditions. China was listed as a destination for US soybeans in yesterday’s loadings which is giving the complex additional support. Yearly soybean loadings trail last year by 470 million bu though, which is tempering the market’s strength.
Rumors that Russia was interested in our wheat supported that complex yesterday, and actually made it the leader on the market. Once it was announced that talks between the US and China were breaking down wheat back-peddled same as the other commodities. Yearly wheat loadings are 60 million bu under a year ago and 120 million bu under trade estimates. Wheat traders are also showing more interest in weather, mainly to see if winterkill will be as large as some believe.
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
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