AM Comments 10/13/16
Thursday, October 13, 2016, 12:10 PM
Submitted by: Dustin Weiner
Corn and soybeans were both mixed overnight after trading lower into yesterday’s close. Corn was down around 8 cents yesterday, the USDA report was mostly viewed as neutral as yield, production and carryout were all near expectations. This initially gave corn a little strength but a few minutes later corn started to grind lower. It felt like the USDA’s confirmation of a record crop – though expected – shifted the mindset of the traders back into big supplies and made it tough to justify new longs entering the market.
Soybeans were also down around 8c on the close yesterday as the USDA confirmed a large soybean crop with yield and production both pushing into new records. The US ending stocks (carryout) number was a little behind guesses at 395m bushels due to increased exports and this did initially give soybeans a boost. However, in similar fashion to corn – it was hard to ignore the record production and soybean futures leaked lower throughout the day, especially as we neared the close.
Big picture on both commodities – this report was close to estimates and didn’t rock the boat as many feared it would. Without any major bearish surprises I am now hearing that many traders feel the bottom of our recent ranges should hold. That perceived ‘floor’ may actually rise a bit as grain starts to get put away, but it looks like we could spend more time in the bottom half vs the top until we gather more info on production. I also want to mention that it feels like many in the trade were braced for even larger soybean production numbers due to the somewhat ridiculous yield reports that are out there… That didn’t happen which could keep a bit of a bid under beans in the short term as we turn our focus to the last 50% of harvest and the start of the growing season in South America.
For today it is pretty easy to call everything “mixed”. The trade is probably still trying to digest everything learned yesterday. The outside markets look a little negative thanks to weak Chinese trade data which raised concerns about their economy. Also, it looks like Wall Street will see more selling today as well which isn’t helping the mood.
Corn is steady to 1c higher
Soybeans are 1 to 2 cents higher
Have a great day!
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