PM Comments 01/13/15
Tuesday, January 13, 2015, 3:01 PM
Submitted by: Dustin Weiner
After trading higher for a good portion of the morning, corn failed to take out yesterday’s highs and proceeded to tumble. Once prices turned red, they kept slipping all the way into the close, ending just over 16c lower. Fund selling can take some of the credit as the funds were estimated to have sold 4,000 contracts of corn at midday today. It seems that some of the fund traders are (finally) coming to the realization that crude oil prices are linked to ethanol prices…
The chart for soybeans today looks similar to corn – trading higher early on only to give way to selling. The story here is simply: the trade needs to deal with the glut of soybeans in the world, focusing now on the (potentially) record large South American crop. SA weather forecasts are starting to show improved chances of rainfall across the dry areas of Brazil next week, which allowed the selling in the soy complex to take place with little pushback. If this SA crop is as big as they say it is, that large 410 million bushel carryout that was printed yesterday has the chance to increase as South American beans would no doubt compete strongly with the U.S. for export business.
Closing quote board: