Market Update; Friday, March 8th, 2019
Trade awaits USDA report.
Commodities have started out today’s session in a narrowly mixed range as traders await the monthly supply and demand data that will be released at 12:00 Noon ET. Values are simply consolidating ahead of this data, which really isn’t expected to give us any big surprises. The rumors of elevated Chinese business have been negated by a delay to the next round of talks and no confirmed business. Chinese officials are concerned with the lack of a resolution between the US and North Korea earlier this week, and how they feel a deal with the US is less likely.
Corn futures have tried to rally this morning, but are struggling. The most negative factor for corn futures is price compared to other corn sources. Several buyers have passed on US corn this week in favor of cheaper offerings from others, mainly South America and the Black Sea. This has dropped corn sales into Asia 25% from last year to this year. Corn is being supported by thoughts we will not see as many acres planted as trade is expecting. Average carryout estimate for today on corn is 1.74 billion bu.
Soybeans are in the red this morning as an end to the trade dispute between the US and China appears to be fading. Soybeans were supported yesterday by rumors of Chinese bookings, but uncertainty on volume, a shipping date, and lack of confirmation on a whole have erased that support. Soybeans have found some support from the transit issues in Brazil and thoughts they may impact exports. While this is possible, trucks should start deliveries again today, which will make any disruption to exports very short lived. The average carryout number on soybeans for today’s report is 902 million bu.
Wheat is actually showing minimal advances today as we see pre-report short covering in that complex. Of all the commodities, wheat has the least amount of fundamental support. It sounds like a broken record, but large global stocks are the primary negative factor for wheat. Interest in new crop wheat is picking up though which is supportive. There are also thoughts that spring wheat is being hurt by current weather conditions, but it is too early to confirm this. Ending stocks on wheat are projected at 1.02 billion bu for today’s report.
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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