AM Comments 02/05/15
Thursday, February 5, 2015, 8:02 AM
Submitted by: Dustin Weiner
The overnight trade was mixed – but solidly higher this morning on relatively strong volume. The strength seems to be coming from the oilseed side of the equation – palm oil has rallied a staggering 5% overnight (!!) after news that Indonesia is going to increase subsidies for biodiesel production in a big way. You don’t hear me talk much about palm oil but it is directly linked to soybean oil, which of course effects soybean crush margins.
Farmer selling slowed down yesterday (not surprising with the lower markets) which should firm basis a touch. Although – this market needs to deal with the fact that A) US corn is still struggling to be competitive in the world and B) South American soymeal may actually pencil out to move into the US with a lot of that tied to the currency markets.
Export sales were out this morning – call the report in line with estimates for corn/wheat but on the lower end of estimates for soybeans. Not a lot to go on there. Overall for today prices should open firmer at 8:30, following the overnight session’s strength. We need to beware of a choppy trade turning into a lower trade as the outside markets have really been pushing our prices around lately and have been difficult to predict. Rallies still appear like they are meant to be sold…
Corn 1 to 2 cents higher
Soybeans 4 to 6 cents higher
Have a great day!