AM Comments 01/20/15
Tuesday, January 20, 2015, 7:01 AM
Submitted by: Dustin Weiner
It looks like we are going to start this holiday shortened, 4-day week on the defensive as fund selling overnight has helped push corn and soybean prices lower this morning. The soybean market is struggling to catch its footing as weather patterns for those dry patches of Brazil have finally improved, making the sell button an easy target. Also weighing on the bean market is the large export sales cancellation we saw last week (China cancelling purchases out of the U.S). No doubt that bean traders will be watching this week’s export sales report to see if there are more coming. If so, it will signal the inevitable – demand switching to South America. If this happens pretty much on schedule (the bulls are likely hoping for some delays and additional biz out of the U.S.) the carryout projections for the end of the summer may actually grow larger…
In regards to corn, basis and spreads feel a little firm – which tells us that farmers really aren’t in a hurry to be selling corn at these prices. Of course, they may not have a choice and ethanol production needs to be watched closely as it may be key in giving the trade direction on any demand changes. Overall for corn it will be hard to fall too far – at least not until we can confirm another decent crop in the ground this spring…
Corn down 3 to 4 cents
Soybeans down 6 to 9 cents
Have a great day!