Market Update; Thursday, February 14th, 2019
Trade uncertainty is weighing on early trade.
Corn, soybeans, and wheat are all on the negative side this morning as fund selling has developed in each complex. A general lack of fresh fundamental news is the primary reason for this, but so is a general weakness in all markets, including the financials. Traders do not seem as confident there will be a quick resolution to the trade dispute between the US and China this morning as they were earlier this week. Additional pressure is coming from heavier than expected rains in South America. A reminder, today is the last day for farmers to sign up for MFP payments.
Corn values are actually showing more strength than the other commodities today, although they are still in the red. Increased production estimates for the South American crops is the primary reason for this. Ukraine exports are up 6 million metric tons from a year ago which is also weighing on corn. Corn is finding support from a tight cash market domestically and an unknown sale this morning of 4.8 million bu.
Soybeans are posting a technical correction this morning from recent gains. The complex is also not so sure China will buy as much as initially thought when the US and China started working on their trade issues. Soybeans are also struggling with the fact it seems less likely we will see a major shift from production this coming year. In fact, the case can easily be made that we will see more soybean acres given current economics. Soybeans are trying to take support from ongoing reductions to the size of Brazil’s crop, even with improved weather conditions.
Wheat is under pressure today from simple technical selling We have seen an increase in export interest, but at the same time, wheat supply has risen as well. Wheat traders are keeping an eye on US weather for the possibility of winterkill.
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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