AM Comments 01/13/15
Tuesday, January 13, 2015, 8:01 AM
Submitted by: Dustin Weiner
Grains are higher this morning, with soybeans and wheat rebounding after large losses yesterday (“Turnaround Tuesday”, anyone?). It is surprising that these markets are higher as crude oil meanwhile can’t find a bid, dropping below $45 a barrel (down just shy of $1.50 as I type this) pushing into 6 year lows. There are also concerns that ethanol margins are turning negative which may slow corn demand from the ethanol sector.
On the positive side, traders wonder if yesterday’s sharp decline may have left prices oversold, after all – farmer selling is limited and basis levels on both corn and soybeans at the gulf appear to have firmed a bit yesterday. There are also reports that US corn may finally be competitive in world markets into March. Also, interesting (friendly) news in the soybean market – China customs reported that December soybean imports were a record 8.53 MMT! Wow.
Overall look for prices to potentially hold these rallies to start the day - but upside may be limited and any rallies could/should be viewed as selling opportunities.
Corn 2 to 3 cents higher
Soybeans 5 to 8 cents higher
Have a great day!